Review the doctrine of “Respondeat Superior”.
Review Iglesia Cristiana La Casa Del Senor Inc. Etc. v. L.M. and answer the questions at the end of the case.
Provide an analysis and reasoning to support your conclusion.
You should reference the material in the book to guide your analysis.
INSTRUCTIONS
Make an initial post that is responsive to one of the above questions.
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Chapter 34
Liability to Third Parties and
Termination
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Overview
• LO34-1: Under what circumstances might
a principal be held liable to a third party
on a contract negotiated by an agent?
• LO34-2: Under what circumstances might
a principal be held liable for the tortious
behavior of its agent or independent
contractor?
• LO34-3: How can an agency relationship
be terminated?
34-2
Authority of Agent and
Liability of Principal
• Express authority: Principal explicitly instructed
agent to perform act
• Implied authority: Relationship inferred from
actions/conduct of parties; authority inferred
from nature of relationship
• Apparent authority and estoppel: Third party
reasonably believes (based on actions of
principal) that agency relationship exists
between principal and another individual
34-3
1
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Liability of Principal and Agent for
Authorized Agent Acts
• Authorized acts: Agent acts within scope of
agent’s authority
• Classification of principal: Must be classified as
either disclosed, partially disclosed, or
undisclosed
• Disclosed principal: Agent not liable, principal
liable
• Partially disclosed principal: Agent possibly liable,
principal liable
• Undisclosed principal: Agent liable, principal liable
34-4
Liability of Principal and Agent for
Unauthorized Agent Acts
• Unauthorized acts: Acts that go beyond scope of
agent’s authority
• Third party reasonably believes agent has
authority:
• Agent liable
• Principal not liable
• Third party believes agent mistaken about
his/her authority:
• Agent not liable
• Principal not liable
34-5
Tort Liability and the
Agency Relationship
• Agent’s tortious conduct: Principal directly responsible if:
• Principal directs agent to commit tortious act
• Principal fails to provide proper instruments, tools, or adequate
instructions
• Agent misrepresentation: If agent misrepresents
himself/herself to third party, principal may be tortiously liable
for agent’s misrepresentation
• Respondeat superior: Principal/employer liable if employee
wrongfully injures third party (not because he/she personally
at fault, but because he/she negligently hired agent)
34-6
2
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Questions Regarding Course and
Scope of Employment
•
•
•
•
•
Did employer authorize employee’s act?
Did act occur within time and space limits of employment?
Was act performed (at least in part) on behalf of employer?
To what extent were employer’s interests advanced by act?
To what extent were private interests of employee
involved?
• Did employer provide the means by which act occurred?
• Did employee use force that employer did not expect?
• Did employer know that act would involve commission of
crime?
34-7
Principal’s Liability and the
Independent Contractor
• General rule: Individual who hires
independent contractor not liable for
independent contractor’s tortious actions
under doctrine of respondeat superior,
unless contractor engages in hazardous
activities
34-8
Crime and Agency Relationships
• If agent commits crime, agent liable for
crime
• If agent commits crime in scope of
employment without authorization of
principal, principal not liable for agent’s
crime
• Principal liable for agent’s crime if
principal authorized agent’s criminal act
34-9
3
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Termination of Agency Relationship
• Termination by acts of parties
• Lapse of time
• Fulfillment of purpose
• Occurrence of specific event
• Mutual agreement
• Revocation of authority
• Renunciation by agent
34-10
Termination of Agency Relationship
(cont’d)
•
•
•
•
•
•
•
•
•
Termination by operation of law
Death (of either principal or agent)
Insanity (of either principal or agent)
Bankruptcy (of either principal or agent)
Change in circumstances
Change in law
Impossibility of performance
Disloyalty of agent
War
34-11
4