Liability of Principal for Agent's Torts

Question 1

General Concept

Answer 1

Principal may be vicariously liable for torts of agent under 2 theories:
1) respondeat superior AND
2) apparent authority

• directly liable for own negligence in hiring, retaining, or supervising agent
• directly liable for agent’s tort if they gave agent actual authority to commit the tort or ratified the tort

Question 2

Vicarious Liability

Answer 2

• joint + several liability for agent’s tort will be imputed to principal
• if agent isn’t liable, principal generally can’t be held liable
  -> BUT agent’s immunity from lawsuit doesn’t necessarily bar recovery from the principal

Question 3

Agency and Respondeat Superior

Answer 3

• principal can be liable for torts of agent under respondeat superior
• employer liable for torts of employee committed w/in scope of employment
• vs. generally not liable for torts committed by an independent contractor
• 1st step in determining principal’s tort liability = determine whether employer-employee relationship between tortfeasor + principal

Question 4

Independent Contractor vs. Employee

Answer 4

• distinction is that principal retains right to control manner in which employee performs their work
• vs. does NOT reserve right to control manner in which work is performed by an independent contractor
• i.e. agent is employee if principal has right to tell agent how to achieve the results sought

Question 5

Factors to Consider for Right to Control

Answer 5

• degree of skill required on the job (greater skill, more likely independent contractor)
• whose tools and facilities are used (if principal supplies, more likely employee)
• period of employment (indefinite + long more likely employee)
• basis of compensation (employee more likely based on time, independent contractor more likely based on job)
• business purpose (if hired to perform an act in furtherance of principal’s business, more likely employee, vs. nonbusiness purpose more likely independent contractor)
• whether person has a distinct business (if so, more likely independent contractor)
• characterization + understanding of the parties
• custom and locality regarding supervision of the work

Question 6

Scope of Employment - Factors to Assess

Answer 6

• was the conduct “of the kind” the agent was hired to perform?
• did the tort occur “on the job (i.e. within the time and space limits of the employment)?
• was the conduct actuated at least in part to benefit the principal?

Question 7

Scope of Employment - “Of the Same Kind”

Answer 7

• if nature of employee’s conduct is similar or incidental to that which was authorized, conduct is probably w/in scope of employment
• same general nature as job

Question 8

Of the Kind - Things to Remember

Answer 8

• to be w/in scope of employment, conduct need not be actually authorized
• prohibition by principal does not necessarily remove conduct from scope of employment
• serious criminal acts are normally considered to be outside the scope of employment

Question 9

Scope of Employment - On the Job

Answer 9

• detour (i.e. small deviation) from employer’s direction is w/in scope of employment
• vs. frolic or major deviation requiring substantial departure from employment is beyond scope
• once shown that employee has LEFT scope of employment, there must be proof of return before employer will be held liable for employee’s tort

Question 10

On the Job - Vehicles

Answer 10

• employer’s ownership of vehicle driven by employee at time employee commits tort doesn’t automatically impose liability upon employer for tort

Question 11

Scope of Employment - Motivation to Serve Employer

Answer 11

• core consideration = whether employee’s conduct was actuated, at least in part, by a purpose to serve the employer

Question 12

Motivation to Serve Employer - Wrinkles to Keep in Mind

Answer 12

• employee’s invitation to passengers, unless expressly authorized by employer, is generally held to be outside the scope of employment relationship -> employer would not be held liable for injuries sustained by such passengers
• employer not liable for torts caused by use of substantially different instrumentalities from those authorized (i.e. those creating a greater risk of harm)
• if employee makes a trip w/ two purposes, it will be w/in scope of employment if any substantial purpose of employer is being served

Question 13

Scope of Employment - Ratification

Answer 13

• employer may ratify employee’s torts if normal requisites of ratification are met
• in tort ratification situations, pay particular attention to requirement that employer must have knowledge of all material facts

Question 14

Respondeat Superior + Intentional Torts

Answer 14

• general rule = employer not liable for intentional torts of employee (normally not w/in scope of employment)

Question 15

Exception to General Intentional Torts Rule

Answer 15

Viewed as w/in scope of employment if conduct is:
1) natural incident of employee’s duties (as where force is authorized or nature of work gives rise to hostilities)
2) where employee is promoting employer’s business or is motivated to serve employer OR
3) specifically authorized or ratified by employer

Question 16

Scope of Employment - Misrepresentations

Answer 16

• principal is liable for agent’s misrepresentations (including intentional misrepresentations) if agent had actual, apparent, or inherent authority to make statements concerning the subject matter involved

Question 17

Liability for Acts of Borrowed Employees

Answer 17

• employer may lend services of an employee to another -> q arises of who’s liable if employee commits tort in loaned role
  -> whoever has the primary right of control over the employee is liable

Question 18

Direct Liability

Answer 18

• employer is liable for own negligence if they fail to properly train or supervise employees or independent contractors, or fail to check an employee’s or independent contractor’s criminal record or job history

Question 19

Liability for Acts of Subservants

Answer 19

• doctrine of respondeat superior also applies to authorized subservants
• authorization to hire subservants can be express or implied
  -> implied authorization can arise from past practices, emergency situations, or reasonable necessity to achieve an authorized result
• employer generally NOT liable for torts of a subservant engaged w/o authority

Question 20

Employer-Employee by Estoppel

Answer 20

• where a principal creates appearance of employer-employee relationship upon which third party relies, that principal will be estopped from denying the relationship -> will be liable under respondeat superior

Question 21

Liability for Acts of Independent Contractors

Answer 21

Principal WILL incur liability for acts of an independent contractor where:
- inherently dangerous activities (such as blasting) are involved
- nondelegable duties have been delegated OR
- principal knowlingly selected an incompetent independent contractor (if principal was merely negligent in selecting the independent contractor, the principal is liable only for own negligence in selection, not for the contractor’s negligence)

Question 22

Apparent Authority

Answer 22

Principal is vicariously liable where an agent appears to deal or communicate on behalf of principal + agent’s apparent authority enables agent to:
1) commit a tort OR
2) conceal its commission

• for principal to be liable, there must be a close link between agent’s tortious conduct + agent’s apparent authority
• book notes NOT often tested (usually respondeat superior that gets tested)