View the clip below, in which one person believes they are partners and the other believes it is an employer / employee relationship. Agents may bind the principal in a number of ways. When you are reviewing the video, consider whether the intentions / understanding of each party make a difference, and then respond to the discussion question below.
As a small-business owner, you are faced with rising costs, particularly employment costs, insurance, et cetera. So, you decide to hire some friends and pay them as they work, rather than go through the expense and procedure of bringing in “actual” employees. Your friends wear the business uniform, deal with vendors and customers, and tell friends and family that they work for the business. One friend / employee orders way too much from a vendor. The vendor has dealt with the person numerous times; in fact, the person has been ordering from the vendor for months.
- Since the person who ordered was not an ”employee,” but a friend you hired, are you liable to pay for the improper order?
- Discuss the implications of agency that apply in this situation, and describe at least one (1) way the company may be able to cancel or return the order in question.
- Be sure to support your legal analysis with concepts and definitions from the reading.