Law: #17

Question 1

It is obvious that at the beginning of a lawsuit a lawyer does not know all of the facts. What does the lawyer do because of this?

Answer 1

They will put in all the propositions of what it could be and wait to hear the relevant facts

Question 2

What are the routine questions asked at the beginning of a lawsuit.

Answer 2

1) is there an agency relationship
2) is their and independent contractor relationship
3) Was the person acting within course and scope

Question 3

It is said in the chapter that the acts of an “APPARENT” agent still creates a liability even though it is only apparent due to the doctrine of estoppel. Why is this?

Answer 3

The idea is that a person cant make a promise and then take a legal position to the contrary. If a person makes a promise or statement that is justifiably relied on to the detriment of another, the person making the promise or statement may not thereafter avoid the legal consequences of the promise or statement.

Question 4

Is a principal liable for the wrongful acts of a independent contractor?

Answer 4

No, because the principal only has control over results, and not the methods of the independent contractor.

Question 5

How does course and scope come into play in the litigation of a principal and agent relationship.

Answer 5

The principal is only liable if the conduct of the agent is within the course and scope of his/her employment. In other words, was the agent “on the job”.

Question 6

There is a case in the lesson that talks about a man who was on the road for work (and in this sense on the clock 24 hours a day). He fell asleep at a hotel after finishing an expense report with a cigarette in his hand and caused a fire. How did the court view this? Did they rule in favor of the the smoker (agent) or his company (principal)?

Answer 6

The ruled in favor of the agent saying, an employee does not abandon his employment as a matter of law while temporarily acting for his personal comfort when such activities involve only slight deviations from work that are reasonable under the circumstances, such as eating, drinking, or smoking.

Question 7

There is a difference between negligence and intentional wrong doing, as this example demonstrates:

Suppose, for example, that Mary is a sales representative for the G&P Company. In a grocery store she is building an elaborate display out ofboxes of Super Crackers, which are crackers for teenagers. Zack, a fifteen-year-old boy, deliberately pulls some boxes out of the stack because he
wants the excitement of seeing the whole display collapse. Mary reacts by slapping Zack in the face. Is G&P liable to Zack if Zack successfully files suit against Mary and G&P, claiming money damages because of the intentional tort of battery?

Answer 7

Yes, provided that Mary was acting within the course and scope of her employment. In short, respondent superior applies to torts of negligence and also intentional torts.

Question 8

What is respondeat superior?

Answer 8

vicariousious liability of a principal is respondeat superior which literally means “let the superior speak.”

Question 9

What does indemnify mean?

Answer 9

This means to protect another against loss, damage, or liability.

Question 10

How does the idea of “indemnifying” come into the relationship of principal and agent?

Answer 10

Normally a principal must indemnify hi or her agents.

Question 11

How does the concept of “indemnify” work in a situation where a principal does not have any money to be able to pay for the liability of an agent when the liability was created on the job?

Answer 11

In this case the agent remains liable, but has the right to be reimbursed by the principal if the principal acquires new assets.

Question 12

In a situation in which an employee was reckless and their is a lawsuit that involves punitive damages, can these damages be assessed to the principal? Why or why not?

Answer 12

In this situation the principal can be held liable for punitive damages if a jury finds that the principal authorized the conduct of the agent or was reckless in employing or retaining him.

Question 13

If there is a dispute in a contract claim in which an agent enters into the contract what are the normal questions that are looked at to see if the principal is liable for the contract? (3)

Answer 13

1) Agency: is the person an agent
2) Authority: did the agent have authority (express, implied, or apparent)
3) Disclosure: Did the person the agent contracted with know that the agent was contracting on behalf of their principal

Question 14

What are the three types of authority in the principal-agent relationship?

Answer 14

Express: expressly told

Implied: asked to paint front office, its implied you can go buy paint

Apparent: things the principal has caused others to reasonably believe are within the agents authority.

Question 15

What is the idea of disclosure in regards to contracts that agents make on behalf of their principals?

Answer 15

It means that the agent must disclose in some fashion that the purchases are being made on behalf of the principal, otherwise the agent will be liable for the contract personally.

Question 16

What factors decide whether there is full disclosure or no disclosure. (2)

Answer 16

1) if the agent is acting on behalf of a principal

2) the identity of the principal is disclosed to the third party

Question 17

In regards to the principal what is the difference between full disclosure vs no disclosure given by an agent when the agent is entering into a contract on behalf of the principal.

Answer 17

A principal is only liable if there was full disclosure by the agent.

Question 18

Can an principal be criminally liable for a crime that is committed by an agent or employee?

Answer 18

No a principal can only be held criminally liable if the principal in some way participated in the crime.

Question 19

Change the facts in Dunning. Suppose that John Dunning is an agent for the Smith Corporation (a wealthy national company). To keep Saliba from asking too much money in lease payments, Dunning leases the warehouse in his own name and does not disclose that he is acting for Smith. When Saliba later learns that Dunning was acting for Smith, can Saliba get out of the contract?

Answer 19

No, Saliba cannot get out of the contract. Not having disclosed that he was an agent, Mr. Dunning is personally liable on the contract. Thereafter, there is no bar to him assigning his interest in the contract to the Smith Corporation.

Question 20

Explain what facts need to change for CSX (in the case above) to be liable to Recovery on the contract negotiated by Arillotta.

Answer 20

The evidence was that Mr. Arillotta represented that he was an agent of Recovery Express. Apparent authority requires that Recovery Express (and not Mr. Arillotta) make statements representing that Arillotta is an agent of Recovery Express.

Question 21

This is a review question from chapter 16. What does the phrase respondeat superior mean?

Answer 21

Respondeat superior literally means “let the superior speak.” In application, it means that a principal will be held liable for the tortious conduct of his or her agent.

Question 22

This is a difficult question, but if you understand it, you are really starting to learn. What is the connection between the principle of estoppel (discussed above) and the decision in CSX Transp. (discussed below) to the effect that Arillotta did not have apparent authority to act for CSX?

Answer 22

The doctrine of estoppel prohibits a person from denying the legal effect of statements or promises that he or she makes. In CSX Transp., Inc. v. Recovery Express, Inc., CSX tried to hold Recovery Express liable for statements that another person, Mr. Arillotta, made. In contrast, the doctrine of estoppel would make Recovery Express liable for its statements and Mr. Arillotta liable for his statements.

Question 23

Suppose that the facts in Johnson v. Rogers were that Rogers (the employee) was an alcoholic, but was regularly attending Alcoholics Anonymous (AA) and was reporting his progress back to NAC. Would punitive damages against NAC be appropriate under these facts?

Answer 23

The question here is not whether the conduct of Mr. Rogers should be condemned; it is whether the conduct of NAC (in allowing him to drive) is bad enough that punitive damages should be awarded. First, did NAC authorize Mr. Rogers to drive drunk or injure the Johnsons? The answer is no: there is no evidence that they did. Second, the question is whether NAC was reckless by employing or retaining him, and that is a tougher question. If NAC knows that Rogers attends AA meetings, they thereby know that he is an alcoholic. But, is it reckless, per se, to hire an alcoholic? The answer is no, if they have a reasonable basis for believing that he is controlling his problem. If he is reporting progress from AA meetings it may nevertheless be poor judgment to allow him to drive, but it seems difficult to prove NAC was reckless.

Question 24

Which of the following is not an element of the principle of estoppel?

A promise or statement by an agent

Justifiable reliance

Detriment (suffered by an injured party)

Answer 24

a

The doctrine of estoppel comes into play when there is not agency. In practical terms, estoppel is a substitute for agency.

Question 25

In Edgewater Motels, Inc. v. Gatzke, Walgreens was held liable for harms caused by Mr. Gatzke while smoking in bed at night. Change the facts and suppose that Gatzke was at work and grew angry at a Walgreens customer who said that Walgreens’ pharmacy department was operated by the Italian Mafia. Acting in defense of Walgreen’s reputation, Gatzke criminally assaulted the customer.

Walgreens would not normally be criminally liable for the harms caused by Gatzke, but in this case they are criminally liable because Gatzke was defending the reputration of Walgreens from criminal slander.

Walgrees is not criminally liable for the assault committed by Gatzke.

Walgrees is criminally liable for the assault committed by Gatzke, whether or not the things said by the customer are true.

Answer 25

b

A principal is not liable for crimes committed by an agent unless the principal participated in the crime.

Question 26

In relation to Ermoian v. Desert Hospital which of the following is correct?

Liability on the part of the Desert Hospital was based on the doctrine of estoppel.

Express agency existed between Desert Hospital and Drs. Gubin and Ogata.

Implied agency existed between Desert Hospital and Drs. Gubin and Ogata.

Answer 26

a

There was not express or implied agency, but there was apparent authority, and apparent authority is based estoppel principles.

Question 27

Jed was the agent of Milly. Jed purchases a truck of corn from Orville. Jed was acting for Milly. Orville knew that Jed was acting for a principal but Orville did not know the identity of the principal. Which of the following is correct?

Jed is liable to Orville on the contract.

If Orville later learns that Jed was acting for Milly, he may choose to hold her liable on the contract.

If Orville later learns that Jed was acting for Milly, he may choose to hold Jed and Milly both liable on the contract.

Options a and b are both correct

Answer 27

d

An agent contracting for a partially disclosed principal is liable on the contract. If the third party learns of the identity of the principal, he may choose to hold the principal liable.

Question 28

Milly is an agent of Jed and while on an errand for Jed, she negligently causes an injury to Alice. Which of the following is correct?

Only Milly is liable to Alice for her injuries.

Only Jed is liable to Alice for her injuries.

Milly and Jed are both liable to Alice for her injuries.

Answer 28

c

Milly caused an injury and is liable for it. A principal is liable for the wrongful actions of his agent and Jed is therefore liable to Alice. They are both liable to Alice.

Question 29

Milly is an agent of Jed and while on an errand for Jed, she negligently causes an injury to Alice. Which of the following is correct?

Jed is not required to indemnify Milly for the money Milly must pay to Alice for her injuries.

Jed must indemnify Milly for the money Milly must pay to Alice for her injuries

Indemnification does not apply under these facts.

Answer 29

b

A principal must indemnify his agents for losses they incur while acting for the principal.

Question 30

In Edgewater Motels, Inc. v. Gatzke, Walgreen’s was held liable for harms caused by Mr. Gatzke while smoking in bed at night. In which of the following is Walgreen’s most likely not liable for the conduct of Mr. Gatzke?

He gets drunk in his room and causes damage.
He and his friends are playing a few rounds of poker in his room and a lighted cigarette causes damages.
He leaves his own hotel and goes to the hotel of his girlfriend where damages are caused while they are partying.

Answer 30

c

When he leaves his own hotel and goes to the hotel of his girlfriend he is furthest away from where he should be as an employee. In the other options he may be viewed as “passing the time of day” until he goes back to work in the morning. ]

Question 31

In Torres v. Reardon, the plaintiff, Torres, claimed that he was:

An employee of Reardon so that Reardon would be financially responsible for his (Torres’s) injuries.

An independent contractor so that Reardon would be financially responsible for his (Torres’s) injuries.

Neither of these.

Answer 31

a

As an employer, Reardon would be financially responsible for Torres’s injuries. That would not be true if Torres was an independent contractor.

Question 32

Jed was the agent of Milly, but their relationship was hidden. Jed purchases a truck of corn from Orville. Jed was acting for Milly but Orville did not know that. Which of the following is correct?

Jed is liable to Orville on the contract.

If Orville later learns that Jed was acting for Milly he may choose to hold her liable on the contract.

If Orville later learns that Jed was acting for Milly, he may choose to hold Jed and Milly both liable on the contract.

Options a and b are both correct

Answer 32

d

An agent contracting for an undisclosed principal is liable on the contract. If the third party learns of the existence of the principal, he may choose to hold the principal liable.

Question 33

Milly is an independent contractor doing work for Jed, and while doing that work she negligently causes an injury to Alice. Which of the following is correct?

Only Milly is liable to Alice for her injuries.

Only Jed is liable to Alice for her injuries.

Milly and Jed are both liable to Alice for her injuries.

Answer 33

a

Milly caused an injury and is liable for it. A principal is liable for the wrongful actions of his employee but is not liable for the wrongful acts of his independent contractors.