Fluent Essays

timeline for making profit: Investors will need an indication of when they expect some return on their investment so you need to provide some reasonable timelines of when that will be 2016/1/5 ­ BOSSE, et al. v. BRINKER RESTAURANT CORPORATION D/B/A CHILIS | Full­text Opinions http://masslawyersweekly.com/fulltext­opinions/2005/08/22/bosse­et­al­v­brinker­restaurant­corporation­dba­chilis/ 1/3 - BOSSE, et al. v. BRINKER RESTAURANT CORPORATION D/B/A CHILIS By: admin  in Fulltext Opinion, Massachusetts Superior Court   August 22, 2005 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, SS. SUPERIOR COURT CIVIL ACTION NO. 03­5064­A BRENDAN BOSSE, minor by his mother and next friend, ANN MARIE BOSSE, and MICHAEL GRIFFIN, minor by his father and next friend, MICHAEL GRIFFIN, SR., Plaintiffs, V. BRINKER RESTAURANT CORPORATION d/b/a CHILI’S GRILL AND BAR, Defendant. RULING Upon DEFENDANT BRINKER RESTAURANT CORPORATION’S MOTION FOR SUMMARY JUDGMENT _________________________________________________________________________ RULING . Upon consideration of all motion and opposition materials, including all affidavits, exhibits, verified answers to interrogatories, deposition excerpts, memoranda of law, and of oral arguments by all parties, the court hereby ALLOWS defendant Brinker Restaurant Corporation’s motion for a full summary judgment against all plaintiffs. REASONING . The two plaintiff teenagers, Brendan Bosse and Michael Griffin, through their parental next friends, are suing the defendant Brinker Restaurant Corporation, doing business as the “Chili’s Grill and Bar” restaurant chain (hereinafter “Chili’s”), for compensatory damages for personal injuries. The injuries resulted from a high speed car chase. The teenagers allege that another driver pursued them negligently, grossly negligently, or recklessly, so as to cause them to crash. They claim that the pursuer was acting as a servant or agent of a Chili’s Restaurant. Details will follow. Summary Judgment Standards . Summary judgment is appropriate if a plaintiff has no reasonable expectation of proving an essential element of his claim. Kourouvacilis v. General Motors Corporation, 410 Mass. 706, 716 (1991); Tambolleo v. Town of West Boylston, 34 Mass. App. Ct. 526, 530 (1993). Summary judgment is inappropriate if a genuine issue of material fact remains open. For that determination the motion judge must examine the factual materials in the light most favorable to the party resisting summary judgment. Corellas v. Viveiros, 410 Mass. 314, 316­317 (1991); Kelley v. Rossi, 395 Mass. 659, 661 (1985); and Conley v. MBTA, 405 Mass. 168, 173 (1989). The Undisputed Facts In the light most favorable to the plaintiffs Bosse and Griffin, the undisputed factual materials tell the following story. On the evening of September 20, 2003, Bosse and Griffin were part of a group of four teenagers ordering and eating a meal at the Chili’s Restaurant on the Providence Highway, Route 1, Dedham. The tab for the meal came to $56. They decided not to pay. They went out of the building, got in their car (a gold­colored Camry), and headed northward up Route 1. A regular patron of the restaurant saw them leave without payment. He followed them in a white sports utility vehicle. They saw him following. They drove into a parking lot at a nearby Best Buy electronics store. The pursuing patron followed them into that lot. He got out of his SUV and yelled words to the effect that he had seen them skip out on their bill at Chili’s and that they would not get away with it. The patron’s car was unmarked; it bore no Chili’s insignia. He wore civilian clothing and no uniform or other insignia of employment at Chili’s. http://masslawyersweekly.com/ http://masslawyersweekly.com/fulltext-opinions/author/admin/ http://masslawyersweekly.com/fulltext-opinions/category/fulltext-opinion/ http://masslawyersweekly.com/fulltext-opinions/category/courts/massachusetts-superior-court/ 2016/1/5 ­ BOSSE, et al. v. BRINKER RESTAURANT CORPORATION D/B/A CHILIS | Full­text Opinions http://masslawyersweekly.com/fulltext­opinions/2005/08/22/bosse­et­al­v­brinker­restaurant­corporation­dba­chilis/ 2/3 The teenagers then drove out of the Best Buy lot. The patron pursued them. A high speed chase ensued through Dedham side streets. By cell phone the patron was communicating to a male employee at Chili’s a description of the teenagers’ car and the path of the chase. The male employee, in turn, was giving this information to the outlet manager, Frank Conway. Conway called 911 and informed the dispatcher (a) that the teenagers had run out on their bill, (b) that some of “our regulars were leaving and they . . . they followed them and they just phoned back saying that they were down by the CVS and the high school.” Conway described the teenagers’ gold­colored Camry to the dispatcher. As Conway’s call was in progress, the 911 dispatcher was receiving multiple calls from observers reporting a crash of an automobile in the vicinity of Dedham High School. In the course of the high speed chase, the teenagers had collided with a cement or brick wall. The plaintiffs Bosse and Griffin suffered the injuries generating the present lawsuit against Chili’s. The Chili’s patron continued past the crash scene and left the area. He remains unidentified. Analysis . The plaintiffs sue upon the theory of respondeat superior. They contend that the Chili’s patron converted to a Chili’s servant; that he conducted his chase as an agent of the restaurant; and that the restaurant should be liable for the consequences of his negligent or reckless pursuit. In these circumstances an agency relationship will require three elements. Most obviously, Chili’s must have consented to the action of the patron in its behalf. Restatement of Agency (Second), § 1(1). Second, Chili’s must have retained control, or the right of control, over the physical conduct of the patron in the performance of the pursuit. Hohenlestner v. Quorum Health Services Resources, Inc., 435 Mass. 424, 436 (2001); Kelley v. Rossi, 395 Mass. 659, 661 (1985); Kovich v. Burke Moore Co., Inc., 355 Mass. 463, 468 (1969); and Restatement of Agency (Second), § 1(1). Third, the conduct of the agent must serve the benefit or further the interest of the principal. Pinshaw v. Metropolitan District Commission, 402 Mass. 687, 694 (1988); Kelley v. Middlesex Corporation, 35 Mass. App. Ct. 30, 32 (1993); and Restatement of Agency (Second), §§ 39, 228 (1958). Do the undisputed material facts permit a genuine issue whether Chili’s (1) consented to, (2) controlled, and (3) benefitted from, the pursuit of the deadbeat teenagers by the zealous patron? 1. Consent. The evidence is insufficient to create a genuine issue whether Chili’s appointed or authorized the patron to act as a posse to conduct a chase. No information indicates any preliminary communication between the patron and restaurant manager, Conway. The events were spontaneous and fast breaking. No member of Chili’s house staff joined in the pursuit. (Manager Conway gave deposition testimony to the effect that Chili’s had an unwritten but express policy forbidding staff to pursue a tab­dodgers out of the building. I do not rely upon that representation for purposes of the present analysis.) The plaintiffs argue that Chili’s effectively assented to an agency relationship by acceptance of the patron’s reconnaissance reports during the course of the chase; and by its failure to instruct him to break off the chase. That circumstance is not enough. The patron need not have been an agent to engage in that conduct. He was pursuing petty crime. Chili was reporting the petty crime to the police. No meaningful private beneficial relationship was necessary for those purposes. No information indicates that any authorized person at Chili’s deputized the unidentified chaser as a collection agent. 2. Control. The evidence does not support a finding of control or a right of control. From the speed of events no opportunity arose for communication or agreement between manager Conway and the patron. No understanding between them materialized. No information indicates that Chili’s had any effective control over the patron; that is, that Conway could have commanded the patron to give up the excitement of the chase. Nor does it seem plausible that the restaurant would have accepted control or supervision over a high speed chase through the side streets of the adjacent community. 3. Benefit or furtherance. The maximum benefit available to Chili’s was recovery of the $56. The comparative insignificance of that benefit detracts from, if it does not eliminate altogether, another necessary element of the proposed agency relationship: the furtherance of a meaningful interest of the alleged principal. No such serious interest existed here. Rather Chili’s received a minor, voluntary, unrequested benefit independently of any legal relationship, agency or otherwise, with the patron. The voluntary conferral of such a benefit creates no legal relationship. Restatement of Restitution § 112 (1936). The dominant purpose of Chili’s relay of the patron’s reports to the police appears to have been the public interest in the apprehension of petty criminals and not the private recovery of the unpaid bill. Conclusion. For these reasons no genuine issue of material fact emerges upon a claim of an agency relationship. The information generated by discovery does not permit an inference that Chili’s consented to such a relationship; that it had the right of control necessary for such a relationship; or that it possessed a genuine interest or benefit in such a relationship. The burden of the plaintiffs is to establish at least a genuine question of the presence of all three elements. If the evidence had failed to materialize upon any one of those elements, the deficiency would be fatal to the lawsuit. The evidence appears to have failed to materialize upon all three of the elements. Consequently, the plaintiffs enjoy no reasonable expectation of proving an agency relationship. Full summary judgment is appropriate. ____________________________________ Mitchell J. Sikora, Jr. Justice of the Superior Court Dated: C:\Documents and Settings\user_n\Desktop\Court\Sikora\Chilis.wpd/mr http://ad1.dolanadserver.com/lwmass/www/delivery/ck.php?oaparams=2__bannerid=350__zoneid=139__cb=e66e7ef1f0__oadest=http\%3A\%2F\%2Fwww.lwopinions.com 2016/1/5 ­ BOSSE, et al. v. BRINKER RESTAURANT CORPORATION D/B/A CHILIS | Full­text Opinions http://masslawyersweekly.com/fulltext­opinions/2005/08/22/bosse­et­al­v­brinker­restaurant­corporation­dba­chilis/ 3/3 Copyright © 2013 Massachusetts Lawyers Weekly  10 Milk Street, Suite 1000,  Boston, MA 02108  (800) 451­9998 tel:(800) 451-9998 http://www.thedolancompany.com/ Chapter 31 Employment, Worker Protection, and Immigration Law Workers’ Compensation Acts Workers’ compensation: Compensation paid to workers and their families when workers are injured in connection with their jobs These acts help workers receive compensation for injuries that occur on the job Workers file a claim with the agency Agency determines legitimacy of claim Compensation benefits are paid accordingly Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Workers’ Compensation Insurance States require employers to: Purchase workers’ compensation insurance, or Self-insure by making payments, if they have the ability to pay compensation claims Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Employment-Related Injury Injury to an employee that arises out of and in the course of employment Workers’ compensation insurance covers: Physical injuries Stress Mental illness, that are employment related Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Exclusive Remedy Workers’ compensation is an exclusive remedy Workers cannot sue their employers in court for damages, except when employer intentionally injures an employee Workers can sue third parties to recover damages Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Case 31.1:Workers’ Compensation Case Kelley v. Coca-Cola Enterprises, Inc. Web 2010 Ohio App. Lexis 1269 (2010) Court of Appeals of Ohio Issue Is Kelley entitled to workers’ compensation benefits? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Occupational Safety and Health Act Promotes safety in the workplace Established the Occupational Safety and Health Administration (OSHA) Imposes record-keeping and reporting requirements on employers Requires employers to post notices in the workplace, informing employees of their rights Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Occupational Safety and Health Administration (OSHA) Empowered to enforce the Occupational Safety and Health Act Empowered to adopt rules and regulations to interpret and enforce the act Adopted thousands of regulations to enforce the safety standards established by the act Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-8 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Types of OSHA Standards Specific duty standards: Developed and apply to specific equipment, procedures, type of work, individual industry, unique work conditions, and the like General duty standards: Imposes on an employer a duty to provide a work environment that is free from recognized hazards Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Fair Labor Standards Act (FLSA) Prohibits child labor Establishes minimum wage requirements Establishes overtime pay requirements Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Child Labor The Fair Labor Standards Act forbids the use of oppressive child labor shipping of goods produced by businesses that use oppressive child labor Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Department of Labor Regulations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-12 Age(in years) Occupation Less than 14 Newspaper deliverers 14–15 Non-hazardous jobs; limited hours 16–17 Non-hazardous jobs; unlimited hours 18 and above Any job Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Minimum Wage and Overtime Pay Employees should be paid the federal minimum wage for all hours worked Students and apprentices can be paid less than the minimum wage Employees should be paid overtime pay of one-and-a-half times their regular pay for each hour worked in excess of 40 hours that week Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Case 31.2: U.S. Supreme Court Fair Labor Standards Act Case IBP, Inc. v. Alvarez 546 U.S. 21, 126 S.Ct. 514, 163 L.Ed.2d 288, Web 2005 U.S. Lexis 8373 (2005) Supreme Court of the United States Issue Is the time spent by employees walking between the locker room and production area compensable under the Fair Labor Standards Act? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-14 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Exemptions from Minimum Wage and Overtime Pay Requirements Executives Administrative employees Learned professionals Highly compensated employees Computer employees Outside sales representatives Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-15 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Family and Medical Leave Act Guarantees workers unpaid time off from work for family and medical emergencies Applies to companies with 50 or more workers, federal, state, and local government workers Employee must have worked for employer for at least one year Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-16 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Family and Medical Leave Act Provides up twelve weeks of unpaid leave for: Birth of child Placement of child for adoption or foster care Serious health condition Care for spouse, child, or parent with serious health condition Employee must be restored to same or equivalent position upon return Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-17 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Consolidated Omnibus Budget Reconciliation Act (COBRA) Terminated employee must be offered the opportunity to continue group health insurance Employer must notify covered employees of their rights under COBRA Group rate premium should be paid to continue coverage Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-18 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Employee Retirement Income Security Act (ERISA) Applies to employer-offered pension plans Designed to prevent fraud and abuses in private pension plans Employers are subjected to record-keeping and disclosure requirements Provides for vesting Vesting: occurs when an employee has a nonforfeitable right to receive pension benefits Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-19 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Government Programs Unemployment compensation: paid to workers who are temporarily unemployed Employers pay unemployment taxes To collect benefits, applicants must be available for work Workers fired due to bad conduct or workers who quit voluntarily, are not eligible Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-20 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Government Programs Social security: provide limited retirement and death benefits to certain employees and their dependents Retirement benefits Survivors’ benefits Disability benefits Medicare benefits Failure to submit taxes results in interest payments, penalties, and criminal liability Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-21 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Immigration Law Administered by U.S. Citizenship and Immigration Services(USCIS) H-1B visa: allows U.S. employers to employ in the United States foreign nationals who are skilled in specialty occupations EB-1 visa: allows U.S. employers to employ in the United States foreign nationals who possess extraordinary ability for certain types of employment Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-22 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Immigration Law The Immigration Reform and Control Act(IRCA) requires the employer to: Obtain a completed Form I-9 for every employee Examine evidence of employee’s identity The IRCA imposes criminal and financial penalties on employers who knowingly hire undocumented workers Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-23 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 31-24 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Chapter 32 Labor Law and Collective Bargaining 42 - * The right of workers to form, join, and assist labor unions is a statutorily protected right in the United States. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-2 42 - * Learning Objectives Describe how a union is organized Explain the consequences of an employer’s illegal interference with a union election Describe the process of collective bargaining Describe employees’ rights to strike and picket Explain labor’s bill of rights Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-3 42 - * Federal Labor Union Statutes Norris-LaGuardia Act National Labor Relations Act Labor-Management Relations Act Labor-Management Reporting and Disclosure Act Railway Labor Act Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-4 * 42 - * Organizing a Union Employees have right to: Form, join, and assist labor organizations Bargain collectively through chosen representatives Engage in concerted activity to promote these rights Bargaining unit must be defined before union petitions for election Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-5 42 - * Types of Union Elections Contested election: contested by the employer Consent election: not contested by the employer Decertification election: employees may wish to dissolve union Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-6 42 - * Union Solicitation on Company Property Employer may restrict solicitation activities by employees to nonworking areas during employees’ free time Nonemployees may be prohibited from soliciting on behalf of the union anywhere on company property Inaccessibility exception: permits employees to engage in union solicitation on company property, if they are beyond reach of the union Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-7 42 - * Case 32.1: U.S. Supreme Court Organizing a Labor Union Case Lechmere, Inc. v. National Labor Relations Board 502 U.S. 527, 112 S.Ct. 841, 117 L.Ed.2d 79, Web 1992 U.S. Lexis 555 Supreme Court of the United States Issue May a storeowner prohibit nonemployee union organizers from distributing leaflets in a shopping mall parking lot owned by the store? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-8 42 - * Illegal Interference with an Election Unfair labor practice for employer to interfere with, coerce, or restrain employees from exercising their statutory right to form and join unions Unions prohibited from engaging in unfair labor practices that interfere with a union election Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-9 42 - * Collective Bargaining Act of negotiating contract terms between an employer and the members of a union Subjects of collective bargaining: Compulsory subjects: wage, hours, and other terms and conditions of employment Permissive subjects: not compulsory or illegal Illegal subjects: cannot be negotiated or agreed upon Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-10 42 - * Union Security Agreements Closed shop: employer agrees to hire only employees who are already members of a union Union shop: employer may hire anyone whether he belongs to a union or not, but the employee must join the union within a certain time period Agency shop: employer may hire anyone whether she belongs to a union or not, but the employee must pay an agency fee to the union Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-11 42 - * Strikes A union can call a strike: If a collective bargaining agreement cannot be reached To obtain economic benefits To correct an unfair labor practice Union members refuse to work during a strike Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-12 42 - * Cooling-Off Period A mandatory sixty days’ notice before a strike can commence Gives the employer and union enough time to negotiate a settlement Illegal for a strike to commence during the sixty- day period Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-13 42 - * Illegal Strikes Violent strikes Sit-down strikes Partial or intermittent strikes Wildcat strikes Strike in violation of no-strike clause Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-14 42 - * Crossover and Replacement Workers Crossover workers: employees who choose not to strike or return to work after joining the strikes Replacement workers: hired on temporary or permanent basis to take the place of the striking employees Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-15 42 - * Employer Lockout Act of the employer to prevent employees from entering the work premises when the employer reasonably anticipates a strike. Employer Lockout Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-16 * 42 - * Picketing Strikers walking in front of the employer’s premises, carrying signs announcing their strike Picketing is lawful unless it: Is accompanied by violence Obstructs customers from entering employer’s place of business Prevents entry of nonstriking employees Prevents pickups and deliveries at employers place of business Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-17 42 - * Secondary Boycott Picketing Unions try to bring pressure against an employer by picketing the employer’s suppliers or customers Lawful only if it is product picketing, that is, picketing against the employer’s product Illegal, if directed against the neutral employer Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-18 42 - * Internal Union Affairs Unions may adopt internal union rules to regulate the operation of the union, acquire and maintain union membership, and the like Subject to Landrum-Griffin Act’s labor bill of rights. Each union member has equal rights and privileges to: Nominate candidates for union office Vote in elections Participate in membership meetings Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-19 42 - * Internal Union Affairs A union may discipline members for: Walking off the job in a nonsanctioned strike Working for wages below union scale Spying for an employer Any other unauthorized activity that has an adverse economic impact on the union Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 32-20 42 - * 32-21 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Chapter 29 Agency Formation and Termination Introduction to Agency Formation and Termination Use of agents — allows one person to act on behalf of another Independent contractors — Outside contractors who are employed by a principal to conduct limited activities for the principal Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-2 Page 487 * Agency Principal–agent relationship The fiduciary relationship “which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-3 Page 487 * Agency Agency law: The large body of common law that governs agency A mixture of contract law and tort law Principal: A party who employs another person to act on his or her behalf Agent: A party who agrees to act on behalf of another Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-4 Page 487 * Exhibit 29.1: Principal–Agent Relationship Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-5 Page 487 * Who Can Initiate Agency Relationship Any person who has the capacity to contract can appoint an agent to act on his or her behalf Persons who lack contractual capacity cannot appoint an agent Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-6 Page 487-488 * Kinds of Employment Relationships Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-7 Type of Relationship Description Principal–agent The agent has authority to act on behalf of the principal, as authorized by the principal and implied from the agency. An employee is often the agent of his employer. Employer–employee An employee is hired to perform a task or service. An employee cannot enter into contracts on behalf of the employer. Page 488 * Independent Contractor Principal-independent contractor relationship: The relationship between a principal and an independent contractor The contractor is not an employee of the principal but has been employed by the principal to perform a certain task on behalf of the principal A principal can authorize an independent contractor to enter into contracts Principals are bound by the contracts Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-8 Page 488-489 * Case 29.1: Agency Case Bosse v. Brinker Restaurant Corporation, d.b.a. Chili’s Grill and Bar Web 2005 Mass. Super. Lexis 372 (2005) Superior Court of Massachusetts Issue Is the restaurant patron who engaged in the high-speed car chase an agent of Chili’s? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-9 Page 489-490 * Power of Attorney An express agency agreement that is often used to give an agent the power to sign legal documents on behalf of the principal General power of attorney: A principal confers broad powers on the agent to act in any matters on the principal’s behalf Special power of attorney: A principal confers powers on an agent to act in specified matters on the principal’s behalf Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-10 Page 491 * Case 29.2: Scope of Employment Case Matthews v. Food Lion, LLC 695 S.E.2d 828, Web 2010 N.C. App. Lexis 1151 (2010) North Carolina Court of Appeals Issue Was Hall acting within the scope of her employment at the time of the accident? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-11 Page 491-492 * Formation of Agency Relationships Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-12 Type of Agency Formation Enforcement of the Contract Express Authority is expressly given to the agent by the principal Principal and third party are bound to the contract Implied Authority is implied from the conduct of the parties, custom and usage of trade, or act incidental to carrying out the agent’s duties Principal and third party are bound to the contract By ratification Principal and third party are bound to the contract Principal and third party are not bound to the contract unless the principal ratifies the contract Page 492-493 * Formation of Agency Relationships Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-13 Type of Agency Formation Enforcement of the Contract Apparent Authority is created when the principal leads a third party to believe that the agent has authority Principal and third party are bound to the contract Incidental Authority that is implied to act beyond express agency powers to take all actions reasonably necessary to protect the principal’s property and rights Principal and third party are bound to the contract Page 493 * Principal’s Duties Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-14 Page 493 * Principal’s Duty to Compensate A duty that a principal owes to pay an agreed-upon amount to the agent Either upon the completion of the agency or at some other mutually agreeable time Agency contract specifies the compensation to be paid No agreement as to the amount of compensation – principal will pay the agent the customary fee paid in the industry Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-15 Page 493 * Principal’s Duty to Reimburse The principal owes a duty to reimburse the agent for expenses incurred by the agent if the expenses were Authorized by the principal Within the scope of the agency Necessary to discharge the agent’s duties in carrying out the agency Unless otherwise agreed upon Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-16 Page 493 * Principal’s Duty to Indemnify A principal owes a duty to indemnify the agent for any losses the agent suffers because of the principal’s conduct Duty to cooperate: The principal owes a duty to cooperate with and assist the agent in the performance of the agent’s duties and the accomplishment of the agency Unless otherwise agreed upon Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-17 Page 493-494 * Agent’s Duties Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-18 Page 494 * Agent’s Duty to Perform An agent’s duty to a principal that includes Performing the lawful duties expressed in the contract Meeting the standards of reasonable care, skill, and diligence implicit in all contracts Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-19 Page 494 * Agent’s Duty to Notify An agent owes a duty to notify the principal of important information concerning the agency Imputed knowledge: Information that is learned by an agent that is attributed to the principal Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-20 Page 494-495 * Agent’s Duty to Account A duty that an agent owes to maintain an accurate accounting of all transactions undertaken on the principal’s behalf Requires the agent to Maintain a separate account for the principal Use the principal’s property in an authorized manner Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-21 Page 495 * Termination of Agency by Act of Parties Agency can be terminated by the following acts Mutual assent of the parties If a stated time has lapsed If a specified purpose is achieved Occurrence of a stated event Notice of Termination Direct notice Constructive notice Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-22 Page 496 * Termination by an Unusual Change in Circumstances Unusual change in circumstances – leads the agent to believe that the principal’s original instructions should no longer be valid Termination by impossibility of performance The loss or destruction of the subject matter of the agency The loss of a required qualification A change in the law Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-23 Page 497 * Termination by Operation of Law An agency contract is terminated in the following circumstances The death of either the principal or agent The insanity of either the principal or the agent The bankruptcy of the principal The outbreak of a war between the principal’s country and the agent’s country No duty to notify third parties about the termination Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-24 Page 497 * Wrongful Termination The termination of an agency contract in violation of the terms of the agency contract The nonbreaching party may recover damages from the breaching party Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 29-25 Page 497 * 29-26 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.