Read the summary and the most important questions on Test 5

• 1 ppt. 1Agency Relationship & Why its important

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• A. What is a fiduciary relationship?

  manifestation of consent by one person to another that the other shall act in his or her behalf  and subject to his or her control, and consent by the other so to act.

• What is a Principal?

  The person or entity on whose behalf and subject to whose control an agent acts.

• B. Why is an Agency Relationship Important? (4)

  Tort Liability, Government Operations, Agent & Principal Duties to One another, Contract Liability.

• 2 Tort Liability

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• A. What is an Employee?

  (servant) is a type of Agent in which employee’s physical conduct is subject to control by employer (master).

• 1. describe a situation of: Known as doctrine of respondeat superior

  S is an employee of M. One day while delivering inventory for M, she negligently hits a third party with the delivery truck. Although S is liable because she committed the tort, M is also liable.

• 2. describe a situation of: Course and scope of employment is defined broadly

  M, the employer, gives S $30 and asks him to go buy donuts for the employees who are working overtime. He takes his own car and injures a third party through his own negligence. The employer is also liable for this tort.

• 3. describe a situation of: Employee need not be following instructions of employer

  P works for Q delivering widgets. One rule that Q has is that all employees must look behind the truck before backing out after all deliveries. P violated this rule and injures R. Q is still liable even though it had taken steps to prevent this type of accident.

• 4. describe a situation of: contributory negligence

  third party’s negligence, is generally a defense for both the agent and his/her principal.

• B. Tort Liability - Independent Contractor

  One who does work for, and receives payment from, an employer, but whose working conditions and methods are not controlled by the employer, and for whose acts and omissions the employer is not liable

• C. Criteria to Determine  Whether individual is Employee or Independent Contractor:

  
  1.How much direction and control the employer exercises over the details of the person’s work;
  2.Whether the person is engaged in an occupation or business distinct from that of the employer;
  3. Who supplies tools used at the place of work;
  4. What degree of skill is required of the worker; and
  5. Duration of employment
  6. Method of payment