Chapter 32

Question 1

Agent

Answer 1

a person who agrees to represent or act on behalf of another

Question 2

Principal

Answer 2

the person whom the agent represents or acts on behalf of

Question 3

Fiduciary

Answer 3

(often call the agent a fiduciary) a person having a special duty created by his agreeing to act for the benefit of another

Question 4

Fiduciary Relationship

Answer 4

A relationship that involves trust & confidence

Question 5

Employer-employee relationships

Answer 5

Agent based relationships

Question 6

Are all agents employees?

Answer 6

No, NOT all agents are employees

Question 7

Are all employees agents?

Answer 7

No, not every employee works with third parties (have outside connections to third parties)

Question 8

Are all workers employees?

Answer 8

No

Question 9

Employees

Answer 9

traditionally paid by hour/salary, taxes withheld.
Liability standpoint: principal (as the hiring company) are responsible for the agent (employee)
Liability insurance is purchased

Question 10

Employer-independent contractor relationship

Answer 10

Agency based relationships

Question 11

Example of an employer-independent contractor relationship

Answer 11

construction - general contractor (the builder), subcontractors (carpenter, roofer, electrician, plumber)
Subcontractors can decide whether or not they want to work on the project with the general contractor
Paid by the job typically, no tax withholding by the builder, subs pay their own self-employment taxes (benefit to the company)

Question 12

As a company (treatment for employer-independent contractor relationship)

Answer 12

• Minimal exposure risk
• Tax benefits
• Sometimes… workers are mislabeled (contractors that are actually employees)

Question 13

Questions used in determining employee status:

Answer 13

1. How much control can the employer exercise over the details of the work?
2. Is the worker engaged in an occupation or business distinct from that of the employer?
3. Is the work usually done under the employer’s direction or by a specialist without supervision?
4. Does the employer supply the tools at the place of work?
5. For how long is the person employed?
6. What is the method of payment – by time period or at completion of the job?
7. What degree of skill is required of the worker?

Question 14

What is the more important question when determining employee status?

Answer 14

How much control can the employer exercise over the details of the work?

Question 15

Coker v. Pershad: Five Star Auto Service was the contract provider of towing services for AAA North Jersey, Inc. A Five Star employee, Pershad responded to the call for towing services of Coker and Pershad assaults Coker with a knife. Coker sues AAA, Five Star Auto and Pershad. (There is no question about Pershad being an employee of Five Star.) The question is whether Five Star is an employee of AAA or is Five Star an independent contractor to AAA?

Answer 15

The court rules that Five Star is an independent contractor of AAA. Responsibility is left with Pershad and Five Star.

Question 16

Employee Status and “Works for Hire”

Answer 16

If a person creates a copyrighted work, the general rule is the work is owned by the creator. If someone else created it, someone else owns it. Intellectual properties.

Question 17

What is the exception to the employee owning his/her own work?

Answer 17

In an employment relationship, the general rule is that if you create it you own it. This doesn’t apply if the work is created under a “work for hire”. The employer would then own the intellectual property.

Question 18

Employee Status and “Works for Hire” Rules

Answer 18

1. So, “work for hire” generally means Employer owns the work.
2. If an employer has an employee create a sculpture or any other copyrightable work, then it is viewed as a “work for hire”.
3. If an employer hires an independent contractor to create a sculpture or other copyrightable work, then the independent contractor owns the work, unless there is a written agreement that says it’s a “work for hire.”

Question 19

Formation of the Agency Relationship

Answer 19

Most agency relationships are consensual. (not always in writing)

Question 20

Agency by Agreement

Answer 20

1. May be an expressed agreement
2. May be an implied agreement

Question 21

Example of a expressed agency by agreement

Answer 21

Hailey gives her daughter Rebecca her credit card and sends her to HEB. Rebecca was given instruction.

Question 22

Example of a implied agency by agreement

Answer 22

Rebecca keeps Hailey’s credit card in her wallet, it is implied that she can use it

Question 23

When an agreement is not present between principal and agent, sometimes another form of agency relationship is present or recognized in the law…

Answer 23

Agency by Estoppel and Agency by Operation of Law

Question 24

Agency by Estoppel

Answer 24

1. The principal’s action creates the appearance of an agency that does not actually exist.
2. A third person reasonably believed that the agency existed.

Forces someone to be responsible for their actions when third parties have clearly relied upon those actions.

Question 25

Estoppel

Answer 25

The principle that precludes a person from asserting something contrary to what is implied by a previous action or statement of that person

As a doctrine provides an equitable solution to a scenario. (IT MUST BE THE PRINCIPAL’S ACTIONS NOT THE AGENTS)

Question 26

Azur v. Chase Bank

Answer 26

For 65 months Azur’s secretary was taking cash advances. The bank had reason to believe that Vanek had authority. Azur gave the bank the impression that she had permission. Azur is forced to accept the actions of his secretary, because HE gave the impression, if it was just HER it would have been a different situation.

Question 27

Agency by Operation of Law

Answer 27

Not common. An agent is needed due to an emergency. Usually in the event of a medical emergency.