One Of The Most Fundamental Issues In Business Law In 163601

One Of the Most Fundamental Issues In Business Law Involves the Quest

One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort). Choose one of the scenarios below and explain whether you think the business is liable for the acts under the principles of agency law. A real estate agent hires a handful of local kids to do the landscaping of homes that he is trying to sell. In addition to the general payment, he reimburses them for the cost of gasoline for lawn mowers and other equipment. While mowing a lawn, one of the kids loses control of a lawn mower and it mows down a neighbor's very expensive collection of lawn gnomes.

In a hurry to get his apartment complex painted, a homeowner hires three people he meets at the local home improvement store to do the work. Since they are not professional painters, he provides all the equipment and paint needed to do the work. While at the apartment complex, one of them breaks into an apartment, assaulting the resident and stealing a wallet. An entrepreneur decides to open up his own car-for-hire business and creates an app allowing anyone to connect with people who need a ride. The passengers pay the entrepreneur, who in turn pays a percentage to the driver. Other than the app, the entrepreneur has no involvement between the driver and the passenger. One night, a driver who is intoxicated picks up a passenger and then gets into an accident, resulting in the passenger being severely injured. (Please choose one)...

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In analyzing the liability of a business under the principles of agency law, the key consideration is whether the individual acting was within the scope of their agency, acting on behalf of the business, and whether the business had sufficient control over the individual's actions. Using the scenario where a real estate agent hires local children to perform landscaping, the determination of liability hinges on establishing whether the children were acting as agents of the real estate agent.

Agency law stipulates that when an individual (agent) acts within the scope of their authority to benefit their principal (the business or individual they represent), the principal can be held liable for the agent's acts. In this scenario, the children are hired to perform landscaping tasks and are paid for their services, including reimbursement for gasoline, which suggests a level of control and organization consistent with an agency relationship. Provided the children were acting under the agent’s guidance and within the scope of their assigned tasks, the real estate agent would likely be held liable for their actions, such as mowing down the neighbor's gnomes.

Conversely, if the children were considered independent contractors rather than agents, the real estate agent's liability might be reduced or eliminated. However, the fact that the agent reimburses expenses and instructs the work indicates a probable agency relationship. Courts tend to scrutinize control and the manner of work to determine agency status. Since the agent’s role included oversight and logistical support, liability for the children’s negligent act during lawn mowing aligns with agency principles.

This scenario demonstrates how principles of agency law facilitate the allocation of liability, ensuring that businesses are accountable for acts carried out by individuals acting on their behalf in the scope of employment or agency. Proper classification of the worker relationship—and understanding the scope of authority—is crucial in determining legal liability. Misclassification could either unfairly shield a business or impose liability where inappropriate, highlighting the importance of clear contractual and operational boundaries.

In sum, because the children were performing lawn care services under the direction and reimbursement of the real estate agent, and their actions occurred within the scope of their work, the agent—and by extension the business—would likely be held liable for the negligent act, following agency law principles. This underscores the importance for businesses to carefully define and understand relationships with individuals they deploy to perform services to mitigate and outline liability risks effectively.

References

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• Garner, B. A. (2014). Black's Law Dictionary (10th ed.). Thomson Reuters.
• Restatement (Third) of Agency. (2006). American Law Institute.
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