Agency: liability of the principal at tort

Question 1

Control test

Answer 1

A person is an employer if the person has the right to control the means and methods by which another performs a task or achieves a result:

• The person subject to this right is an employee.
• Absent a right to control, the person is likely an independent contractor.

Question 2

Scope of employment

Answer 2

An employer is vicariously liable for the tortious conduct of an employee that is within the scope of employment.

Conduct within the scope of employment includes acts

• that the employee is employed to perform or
• that were intended to profit or benefit the employer.

Question 3

Scope of employment: limiting instructions

Answer 3

Careful instructions directed to the employee do not insulate the employer from liability—even when the employee acts counter to the instructions—if the employee is acting within the scope of employment.

Question 4

Apparent authority

Answer 4

A principal is liable for a tort committed by an agent with apparent authority when the agent’s appearance of authority enables him to:

• commit a tort or
• conceal its commission.

For apparent authority to exist, a third person must:

(1) believe that the agent acted with actual authority, and
(2) such belief must be:

(a) reasonable and
(b) traceable to a manifestation by the principal.

Question 5

Frolic

Answer 5

When an employee’s personal errand involves a significant deviation from the path that otherwise would be taken for the purposes of performing work, the errand is a frolic.

Once a frolic begins, an employee is outside the scope of his employment until he resumes performance of his assigned work.

Question 6

Detour

Answer 6

Travel by an employee during the workday that involves a personal errand may be within the scope of employment when the errand is merely a detour (i.e., a de minimis departure from an assigned route).

Question 7

Principal’s direct liability

Answer 7

A principal is directly liable to a third person harmed by an agent’s conduct if:

(a) The principal authorizes or ratifies the agent’s conduct;
(b) The principal is negligent in selecting, supervising, or otherwise controlling the agent; or
(c) The principal delegates to an agent performance of a non-delegable duty to use care to protect other persons or their property, and the agent breaches the duty.