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One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort). Choose one of the scenarios below and explain whether you think the business is liable for the acts under the principles of agency law.

  • A real estate agent hires a handful of local kids to do the landscaping of homes that he is trying to sell. In addition to the general payment, he reimburses them for the cost of gasoline for lawn mowers and other equipment.  While mowing a lawn, one of the kids loses control of a lawn mower and it mows down a neighbor’s very expensive collection of lawn gnomes.
  • In a hurry to get his apartment complex painted, a homeowner hires three people he meets at the local home improvement store to do the work. Since they are not professional painters, he provides all the equipment and paint needed to do the work. While at the apartment complex, one of them breaks into an apartment, assaulting the resident and stealing a wallet.
  • An entrepreneur decides to open up his own car-for-hire business and creates an app allowing anyone to connect with people who need a ride. The passengers pay the entrepreneur, who in turn pays a percentage to the driver.  Other than the app, the entrepreneur has no involvement between the driver and the passenger. One night, a driver who is intoxicated picks up a passenger and then gets into an accident, resulting in the passenger being severely injured.

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