Business Associations Outline

Tort Liability
1)    Agent liability
a)    Must actually do s/t wrong
b)    negl (may be able to recover from P) or
c)    malfeasance (A has duty and fails)
i)     non-feasance alone is insufficient UNLESS A assumed and commenced complete and exclusive control such that he assumed and failed to perform a duty (Franklin)
ii)    Mere status as S not sufficient, neither is not doing something
 
2)    Principal liability
a)    M/S or IC?
i)     Definitions §2
(1) Master:  P who employs A to perform service AND controls (or has right to) physical conduct of A in performance
(2) Servant: A employed by M whose physical conduct is controlled (or subject to) by M
(3) IC: K’s w/ another, but not controlled; may or may not be A
ii)    Factors §220(2) (balance)
(1) Control over details of work (most important, but not conclusive)
(a) Control or influence over results insufficient, must be control of day-to-day operations (Hoover)
(b) Look at K as a whole to determine who had the power of control (Humble)
(c) If M (franchisor) requires uniform logos, operations and décor and it gives 3 impression that M controls, and 3 relies on this representation, M liable (Billops)
(2) Emee in distinct occupation
(3) Occupation normally done under supervision or by specifications w/o supervision
(4) Skill required
(5) Who supplies tools/instrumentalities
(6) Length of time of employment
(7) Method of payment (hourly or by job)
(8) Work part of regular business of employer
(9) Do parties believe they are creating M/S or IC relationship?
(10) P is/is not in the business
b)   M/S
i)     M liable for S’s torts if
(1) Intentional torts: 
(a) Foreseeability is the big issue
(b) M not liable for clearly inappropriate or UNFORESEEABLE acts (Wellman)
(i)    Outrageous act indicates S not motivated by intent to serve M
(ii) M liable only if:
1.    violated duty to 3 (bad hire) OR
2.    nature of instructions to S create liability
(iii)Look at specific facts to determine if act is egregious and unforeseeable (see Brown factors below)
(c) M liable if S’s intentional tort was committed in response to 3’s conduct which interfered w/ S’s liability to perform duties successfully (Manning)
ii)    Within scope of employment
(1) Deviation from scope: balancing test
(i)    Intent to serve M §229
1.    Bushey: sufficient, not req
(ii) Foreseeability
1.    Factors (Brown)
a.    Nature of M’s business
b.    S’s contact w/ public
c.    Likelihood of use of force
d.    Acts w/in auth time/place
e.    S’s motive (personal or M’s)
(iii)Frolic v. abandonment §228
1.    substantial deviation (total abandonment of employment) relieves M of liab, a little deviation isn’t enough (Clover)
(2) P liable for actions outside of scope if
(a) M intended conduct or consequences
(b) M was negl or R
(c) Conduct violated non-delegable duty of M OR
(d) S purported to speak/act on M’s behalf and 3 relied on app auth or Ay aided in commission of tort 
c)    IC
i)     P not liab for torts of IC UNLESS done in a manner directed or auth by P or towards some result intended by P (IC still JSL) (Kourik)
(1) P must control means/manner, not just result
(2) EXCEPT acts P under a duty to perform w/ care AND if P has made representations
(a) E.g. inherently dangerous acts performed by IC (Majestic)
 
Contract Liability
1)    Agent Liability
a)    To 3
i)     Partially undisclosed or undisclosed P §321, 322
(1) A has duty to disclose relationship w/ P and P’s identity; if not, A becomes a party to the K and is liable (Atlantic Salmon)
(2) EXCEPTION: Inherent Ay Power (Watteau)
ii)    Implied Covenant of Authority
(1) A always gives ICA; if A assumes auth exists and is wrong, liable even if they acted in GF (Robinson)
(a) If 3 knew alleged P was incomp, A not liable b/c Ay terminates at death or incomp of P (except durable PoA) 
(2) If A acts on behalf of P after auth terminated, A liable to 3 (act auth only) (Chamberlain)
b)   To P
i)     A accountable to P if he violates the duty of honesty and GF for personal gain (A cannot UE himself)→ $ goes to P
(1) Gifts to A can be considered like tips
ii)    Mere fact that service to P gave A oppty to get $ doesn’t entitle P to the $ BUT if that’s the sole caus