ACCT351 Lecture Notes - Lecture 6: Respondeat Superior, Independent Contractor, Product Liability
ACCT351 Week 6
Agency Law
• Formation of agency
• Formation of independent contractor - often outside parties retained
for special purposes
• Duties of agents and principals
• Termination of the agency relationship
• Agency defined: A fiduciary relationship resulting from the mutual
consent of both parties that one party will act on behalf of the
other
• Agency can only be created to accomplish a lawful purpose
Types
1. Principal — agent (real estate)
◦ When the agent is given the authority to bind and contract for
the principal or corporation — C - suite officers
2. Employer employee
◦ Usually lacks the authority to contract on the principals behalf
3. Independent contractor
4. Torts
◦ Negligence
◦ Product liability
▪ In order to hold an employer liable for an employees
tortious act must have in some way been effectuated to
advance the employer
Massey v. Starbucks
•
Respondeat superior
renders a principal vicariously liable for the acts of
employees committed by his agent while acting within the scope of
employment
Edgewater Motels v. Gatzke 1979
