Mock Class: Business Law and the Law of Agency

all right good morning everyone why don't we go ahead and get started i am george geiss and welcome i'm really happy to be here with you today um i am going to talk today about a topic that many of you have probably never really heard of or never really thought of it's called the law of agency and it's it's a fundamental topic to business law but it's not a very well-known area of of the law if you're like me when i was getting ready for law school i did a fair amount of research on the internet or uh you know picked up a couple of books on the topic of how to how to do well in law school and how to succeed during your first year and you know they all have names like law school confidential or slaying the law school dragon or one l of a ride something like that and they do i think a pretty good job of talking you through the basics of what it's like to to be a first year student and they'll tell you a little bit about contract law and criminal law but they won't say much about agency law it's not a topic that generally gets much attention but nevertheless it is a fundamental area of the law it's usually the very first thing that you'll study whenever you're um getting into business law and uh it used to be actually required 1l class so what is it what is agency law well you've probably heard of a movie agent or a sports agent but the truth of the matter is that anyone can have an agent in fact i bet some of you might have an agent right now perhaps without even realizing it and you might say well professor guy so what who cares well you should care uh in part because agency law says that under certain circumstances you may be responsible legally for the acts of somebody else i'll say that again under certain circumstances you may be responsibly legally for the acts of somebody else and you say well hold on i can barely be responsible for my own acts and now you're telling me i'm going to be responsible for what other people do and the answer is yes maybe and then you say well professor guys how do i know whether i have one of these agency relationship things and the answer is that agency is a special relationship in the law that arises from three major requirements you can have an agency relationship when there's an agreement between the principal and the agent that the agent shall act on behalf of the principal and be subject to his or her control and when you have those three requirements an agreement acting on behalf of and subject to his or her control then you've got an agency relationship so you may say hey professor geiss here's five dollars can you go give me a cup of coffee at the law school coffee shop and if i say yes we might be in an agency relationship i've now become your agent and depending on some additional circumstances you may or may not be responsible for things that i do while i'm getting you that cup of coffee okay well why is this important for corporate law well if you think about it corporations can only act through their agents you know some people will say things like corporations are people too and i'm not sure i really know what that means corporations are treated as separate legal entities often in the eyes of the law but as a matter of reality corporations can only act through other people they can act through their own agents and so you know if you have a company like facebook for example the only way that facebook can really do anything is if mark zuckerberg or sheryl sandberg or one of the other agents of facebook does something on that corporation's behalf so that's why um that's why agency law is usually one of the very first things that you'll study um when you're getting into a class on on corporations okay armed with this knowledge i now want to put you in the position of judge and jury and ask you to help me decide a few cases you have all the law right now that you need to know and while i've handed out a one-written opinion earlier i actually want to start with a slightly different case we'll get to the um um our uh ira bushy case in a little bit but i want to start with another case and this one's known as gorton v doty so let me tell you a little bit about the facts of gordon v doty and then i'll invite you to to pop into the class if you like and you can um um give us your thoughts on how this case should be resolved so the case involved a um a teacher in idaho her name was uh miss dodie and one day miss dodie was hanging around in the faculty uh you know lounge getting a cup of coffee uh when the coach for the football team walked in and uh miss doty asked the coach his name was coast guard coach garst do you have all the cars you need to get the players over the football game this friday night i guess they didn't take a bus at that moment in time they would all sort of drive together in cars over to the away games and the coach said no actually we could use one more car we're a little bit short on having enough transportation to get all the players down to the game and ms doty said okay i tell you what i'll let you use my car to take some players to the game but i don't want a teenager to drive it so i'll only give you my car and let you use it if you're the one that drives the car and the coach says okay great thank you i will do it took the car went to the game we don't know if they won or lost the football game but on the way home the coach was driving her car and he got into an automobile accident and one of the football players gordon was injured in the accident and let's just assume for the purposes of this case that the coach was driving negligently the coach committed a legal wrong by not driving appropriately maybe he was so upset by the loss or so you know excited by the wind that um you know he wasn't being careful in the way that he drove um and um got into the accident and gordon was injured now put your plaintiff's lawyers hats on for a minute and think about under circumstances like this um who might you try to sue if you're gorton or if you're gorton's family you've had some medical bills you don't want to pay for those medical bills yourself you've you know been wronged many of us i think would start by considering the possibility of suing the coach coach was the one perhaps that drove negligently let's try to to go after the coach the problem was that this was a pretty significant accident and um the coach was killed and apparently the coach and the coaches estate didn't have funds to cover the medical bills so another possible defendant might be uh the school the school after all was you know involved in some level in sponsoring this game or sponsoring the event but there was a strange uh rule in place under the under the time of the case that uh prevented the school from being a defendant some sort of an immunity statute that that's rare these days so instead gordon decided that gordon was going to try to sue miss doty gordon was going to um try to go after miss dodie and recover from miss doty from um for for the for the medical harms and the um case really turned on the outcome of whether miss doty was viewed as a principal and coach garst was viewed as an agent of miss doty so here again are the elements there has to be an agreement that um the agent is going to act on behalf of and be subject to the control of the principal and if so you've got an agency relationship and if so then perhaps ms doty would be responsible for the wrongs of coach garst so i want to invite any of you um that want to comment on this case i mean the question right is is this an agency relationship if you're interested or if you have thoughts go ahead and please share your screen you can also comment on the chat if you have any thoughts as well but um i'd like to you know invite a couple of you to share your thoughts do you think that miss doty should be liable for coach garst's negligent driving any thoughts um from from those of you in the class all right we have someone i think who's popping in let me see if i can share his screen william welcome thank you what do you think to answer your question and say yes okay it has all the markings it has all the markings of an agency relationship since number one there was an agreement he agreed to drive her car he specifically agreed that there would be no 17 year olds driving her car so that's also a kind of a sub agreement beneath that he's acting on her behalf and he did follow what she said okay so i would say yes so clearly there was an agreement right there was some type of an agreement um do you think that there's enough evidence that the coach was acting subject to her control or how would we know that he was acting subject to her control well i think just the very act of driving the car would be subject to her control okay distances could be considered a deadly weapon and at the same time can i think it makes it slightly easier considering that he followed what she asked him to do um he wasn't in the passenger seat and drinking a beer as far as we know she conditioned the use of the car on his willingness to follow her direction that he be the one who drives so you know it wasn't as if she told him exactly what route to go but she clearly did put a condition on his use of the car and that might indicate that there was some type of control that she had now let me ask you um about this other element acting on behalf of was the coach acting on her behalf i mean essentially i would say since she could have given the fact that there was this agreement she just as easily could have been the one driving and she could just as easily have been the one in the accident and then she would have been just as liable okay so maybe by virtue of the fact that she didn't have to drive the car we should understand that he was acting on her behalf or he was conveying some sort of a benefit for her let me see if there's any other thoughts anyone else want to jump in go ahead and share your audio and video if you have other thoughts on the case and whether this should give rise to an agency relationship no one else has jumped in so don't don't don't be shy um but the court actually okay here we do have somebody coming in benjamin i think hi benjamin how are you doing i'm doing well how are you uh i said she that he's not her agent because uh you see she gave him a card for his use like you know he's she supplied him in the car she didn't look to hire him for a job he if he if she didn't give him a card he would come to get getting someone else so he was sort of he was a principal looking for a tool to do a job not she was looking to hire someone to do a job she couldn't do herself okay do do you feel like she got a benefit or there was some reason why we should understand the coaches acting on her behalf um i think she got the benefit of for being a good citizen or being a helpful colleague okay um but she wasn't looking to hire a driver for the team he was looking to hire a driver for the team yeah it seems like if anything it might be flipped where yeah he was the one that was receiving a benefit because he got to be able to use the car to get the football players down to the game now um in the end the court actually agreed with william and it said yes i do think that there's an agency relationship here the case was a little bit puzzling i think for the for the reason i just said it's not 100 clear that she was the one that was you know getting the benefit or that he was acting on her behalf maybe there's some sort of a school spirit benefit that she was doing by helping out the school but um i think the case was viewed as a little bit of a puzzle nevertheless i'm gonna excuse you guys for the moment um nevertheless i think it was a situation where um we can see just how important this agency relationship status can be because you know i don't think she would have expected that she would be responsible for his negligent driving but nevertheless the court said there is an agency relationship and therefore we are going to hold her responsible all right let's try um let's try a couple of more hypotheticals and i want to um invite all of you who are um who are here i see there's about 23 or 24 folks so all of you that are here um i'd like to invite you to participate no need to pop in but if you have access to the chat uh i'm gonna ask for um just a yes or no reply in in the chat and you can tell us what you think about this hypothetical so let's imagine that um i come up to you and i say um how are you doing here's my pen and you take my pen have you become my agent tell me what you think in the chat yes or no have you become my agent i'm seeing a lot of no's a lot of no's yeah those of you saying no um you're right you know we don't have the elements um all i've done is give you my pen you know i haven't asked you to do anything with it i haven't you know created anything else um we are in probably what would be understood as a donor dhoni relationship and you know we maybe want to know a little bit more about whether you get to keep it or whether you got to give it back to me but it's not enough that we're going to meet the three elements necessary for an agency relationship let's try once more here's my pen can you sell it for me and you say sure i'll do it are we in an agency relationship tell us what you think yes or no all right lots of yeses are coming through a few no's um probably the answer is yes but it might depend on whether or not i've got enough control over the situation i'm generally telling you what to do sell my pen for me so probably that's enough control to give rise to an agency relationship but we might want to know a little bit more about that control element in order to really figure this one out okay last one you buy my pen for fair value and you're looking to say five dollars or whatever it's worth and you're looking to resell it you're you're in the business of uh pen resale uh a profiteering and you're gonna try to buy my pen for five dollars and then resell it yourself for a profit are you my agent yes or no yeah most of you are saying no we're not in an agency relationship right you're not doing anything for my benefit we are in a distribution relationship or a contractual relationship um we've made a contract and you've now bought my pen and if you can get more for it great for you if you can't get more for it too bad for you but you're not acting on my behalf you're not doing anything necessarily for me okay great thanks for your engagement um let's step back a little bit and talk uh more generally about this overall view of overall area of agency law we've been talking so far about the creation of an agency relationship and how you know whether you've got one of these or not um once you've got an agency relationship it's also important to understand what the consequences are what does it mean for your relationship with with each other and also with a third party because oftentimes agency law will involve some sort of a third party uh participant um there are a number of implications you can take an entire class if you like in this area some of the most important ones though are that the agent can bind the principal to others in contract law again think back to my facebook example this is why corporations often want to have agents is because those agents can enter into contracts on behalf of the corporation second consequence the principal may be responsible for the torts of the agents or the legal wrongs of the agent we saw an example of this already right with gordon v doty miss doty was responsible for the bad actions of um of her agent coach garst finally the agent is going to owe fiduciary duties to the principal so this is not just a normal relationship or a contractual relationship it's a special relationship or a fiduciary relationship in the eyes of the law and what that means is that the agent has to be diligent they have to be careful they have to be loyal to the principle in the way that they carry out all their various activities um this is actually really important for corporate law and a lot of the obligations of corporate officers and board of directors and various folks within the corporate ecosystem flow from duties that were created initially in in agency law and again that's why this is one of the main starting points for for this area of legal studies all right i'm going to skip over implication number one and not worry as much about contract law and i want to move into a couple more cases involving consequence number two situations where the principal might be responsible for the torts or the legal wrongs of the agent but first let me give you just a little more law so that you can be an informed judge and jury um we're going to be working with a theory called respondiat superior there are a few different theories in this in this area but but one of the big ones is known as respondeat superior it basically means let the employer answer for the torts of the employee and in order to have respondeat superior there are two additional requirements first off the agent has to be an employee and not just an independent contractor in other words it has to be a fairly close agency relationship not a distant agency relationship and second the tort or the wrong has to be committed within the scope of employment now the case we'll get to in a minute we'll flesh without that out a little bit um but in in general this has traditionally been understood as the problem arose out of a purpose to serve the employer the the the agent was trying to serve the employer or carry out their agency responsibilities and while doing so they uh incurred some sort of a legal wrong or they did they did something problematic kind of a classic example that's given in in some of the the legal books talking about the development of this doctrine is um you've got a a gardener that's working uh in your home as an employee and um you know there's uh some people that are trespassing on on your uh on your flower bed and the gardener you know picks up a stick and throws the stick at the trespassers you might be responsible for that um under this dr respond yeah superior the tort was committed within the scope of employment because they were trying to protect your garden and get rid of the the interlopers um i'll say a little bit more about uh the first element so we need an employee relationship not an independent contractor relationship and um i won't go through everything here here are some factors i'll just put up there so you can kind of see the various factors that are often important when we're making this distinction um this may be familiar to some of you already at some level right i mean you might already be aware of the difference between an employee and more of an independent contractor employer relationships are going to be subject to greater control by the principal by by the supervisor um if you want a mental model for the difference here you might think about you know coming back to the gardner example two different types of gardeners on the one hand we might imagine a gardener that comes by every couple of weeks mows and goes that's more likely to be an independent contractor they're bringing all their own equipment they're not really you know following careful control or or or really um you know super being supervised by by the homeowner on the other hand we might think of a gardener on you know some show like downton abbey or you know one of those royalty shows that lives in a shed in the back of of the property all the equipment is owned by the homeowner every morning they get up and they say well what do you want me to do today should i you know prune the roses should i cut the hedges well why don't you cut the hedges today that's more like an employee type relationship a closer agency relationship all right now we're ready to take on um our next case and apply this doctrine of respondeat superior to the ira bushy versus us case this is the one that i handed out so some of you might have had an opportunity to read it but even if you haven't had a chance to read the case yet i think we can summarize it pretty quickly in a way that will allow you to hopefully follow along um i guess at the outset we really should acknowledge that some of the terminology and especially some of the language related to to gender is a little bit outdated i mean this is a you know 50 year old case and some of the terminology of the court hasn't aged very well nowadays we wouldn't be talking about you know reasonable men or working men we'd be talking about reasonable people um but i do think it's a notable case it's notable for the facts that it sets up it's notable for its approach to the law um it's also notable at some level for um for its jurisprudential development for the way that it um makes changes to the law and talks about how the law should necessarily evolve through common law reasoning so um i think this case um um has a lot going for it even if i wish the terminology was a little more updated um let me talk quickly about what's going on and then again i'm going to invite some of you to help decide um whether or not this case was was properly properly adjudicated so here's the basic story there was a a coast guard ship that uh had been brought into brookland and it was sitting in dry dock getting retrofitted now while the ship was getting retrofitted the sailors were still living on the ship and they had set up some system where the sailors were going to be able to exit the ship and go off through the dry dock and take shore leave while they were repairing the ship so the sailors were living on the ship during this maintenance period in the dry dock one of the sailors uh named lane went off and took some shore leave and got drunk apparently lane got really really drunk came back to uh the ship um late at night um walked uh you know along the the gangway where lane was supposed to um you know go back to his bunk and lane decided to spin a set of valves in the dry dock um 30 times three valves 30 times and it turned out that those valves controlled the water intake to the dry dock and shortly thereafter the dry dock filled up with water the ship toppled over and the dry dock was damaged now fortunately no one was was really hurt but ira bushy the dry dock owner was notably upset understandably upset and bushy said well i'd like someone to pay for this this harm um lane had sort of disappeared i don't think lane had a lot of money to to pay for this harm anyway so instead bushy said i'd like to try to recover for lane's tort from the coast guard and the legal theory uh turned again on whether or not responding superior liability would attach to the coast guard should the coast guard answer for the torts or the wrongs of lame and again there were two major issues to resolve under this respondeat superior liability standard um was uh lane an employee or an independent contractor and second was lane acting within the scope of his employment during this incident let me invite a few of you to um uh to again share your video share your screen and let's just see if we can talk this one through so go ahead and please uh volunteer if you're interested in in discussing the case and we can try to see what happened and see if the court actually got it right and and talk a little bit more about why that might or might not be the case all right great we've got one one volunteer and go ahead if you're interested in participating please you know don't hesitate jump in as well um vincent welcome hi um let me ask you first about element number one do you think that lane was an employee or was an agency um i think sorry an independent contractor um i think lane was sort of very clearly an employee um both based on one the government providing equipment like lane didn't bring his own boat to do coast guarding um to the fact that um judging by the term seamen i'm assuming he was enlisted in the coast guard which is again uh far more in the scope of employment than independent contracting all right so in your view it looked like he was more of an employee less of an independent contractor so vincent i think i'm with you i mean my guess is that this is sort of the perfect example of an employee type relationship i'll bet that lane didn't feel like he had a lot of responsibility every day and deciding whether or not he was gonna work on this part of the ship or that part of the ship he was probably being directed very much uh what what to do and told what to do so the next question i suppose is um whether or not this wrong occurred in the scope of employment was related to the employment of of of lane before i ask you vincent for your thoughts let me ask again those of you in the chat to give us a quick vote within the scope of employment yes or no what do you think is this activity within the scope of employment all right i'm seeing some pretty split opinions i'm seeing some yeses i'm seeing some no's again those of you that just voted in the chat if you want to come in video you know please don't hesitate it'd be great to have you as well but vincent since you're here let me ask for your opinion was lane acting within the scope of employment during this incident i would argue yes um for a few reasons um the first is in like in his role as a coast guard's men um there is no like defined off period when you're on a boat so like you can not have any listed responsibilities but you still have responsibilities if the ship starts to sink or gets shot at um so one like there are no off hours um it um sort of the the job of maintaining a boat while in dry dock um involves you know turning valves moving things cleaning things um and even though he was obviously drunk and made an error of judgment um in turning the um valves that is still a thing that reasonably he would have done well not he would have done at that time while sober but he would have done cynical similar mechanical activities on and around the boat while sober so do you think that when lane was coming back from shore leave um he was thinking all right what i really need to do now before i go to bed is to help out my employer make sure that the coast guard you know has things go properly with their ship and the right way for me to do that is to spin these these three valves 30 times in other words was he attempting to um to serve the the employer um i would argue yes um although he clearly did not by doing it but i think that was as well it's a little hard to know what he was thinking right i'm not sure that he even knew what he was thinking but um it it does it does relate a little bit i guess to what we might think his obligations were i don't know again if he was the one turning valves or if you know the valves were more the responsibility of the dry dock but it's not um impossible to imagine that uh sailors would sometimes in the course of their duty be be turning various valves now the court actually didn't use this purpose to serve test right it recognized that there was this test that was commonly used to determine if something had happened within the scope of employment but it didn't use this purpose to serve test instead it used an alternative test known as foreseeability was it foreseeable that something like this would happen and you know we get a quote you know in the second part of the opinion it says here was foreseeable the crew members crossing the dry dock might do damage vincent is it foreseeable that something like this would ever happen um i would say yes um given that dry dock incidents happen how many times do you think this has happened before and since i know russia messed up its aircraft carrier because it sunk a floating dry dock because a sailor lit something on fire so maybe it occurs from time to time i'm not sure that prior to being aware of this case i would have thought that it was foreseeable that we would have expected you know this sort of thing to happen but the judge actually goes back a little bit doesn't he in the level of abstraction and say it might not be foreseeable that this specific thing would happen but it's foreseeable that some problem like this could could thereby occur and so i think that's what's important motivating uh motivating the judge all right let me let me let you off the hook for a minute thanks very much for your participation um one of the other important questions i think um relating to this case so so the court of course at the end of the day said um yes actually i do think that the um government's going to be responsible the coast guard is going to be responsible they're going to be liable for um for the problems here and um the theory that uh judge friendly used was a little bit different right than the traditional theory as we just said um one of the other things i think that's important for the case and that's motivating um the outcome of the case relates to the policy implications of the case so i want to ask again if there's any volunteers that that'd be great if anyone wants to just comment on the chat that's fine as well what do we think the results of this decision are going to be on actors going forward in other words do we expect that parties are going to modify their behavior modify the way that they you know carry out their activities in response to the imposition of liability in in in this case and if anything what does that say about whether this case was was properly decided i mean do we think that this result leads to the right incentives for society or do we feel like you know maybe an alternative result would be better and we want to share their thoughts on that question great hello hi how are you good yeah perfect welcome um i would say in the long run this place is the burden on safety towards the employers okay it makes more sense because then the employer obviously has more money typically i would think like a corporation than like an individual person and ultimately i think that would be better for public policy okay so one of the things we might like to have happen is to put incentives in place that are gonna reduce the possibility that an accident like this happens right in the in the future now it may not be this exact accident but something something similar so i think um that's a great avenue of of discussion i guess i'd ask you question one um is there anything that the coast guard could have done to have prevented this sort of problem from occurring i guess they could have hired or been more choosy when it comes to hiring people because it's not like yeah higher people like steven yeah maybe maybe more careful with who it is that you choose to hire um you know seaman lane might not have been the best person to to to bring on anything else you can think of that they could have done well i i know they could have institu instituted better policies within for their employees because i remember i took like a bartending class um once and i'm pretty sure there's like an agency kind of requirement there where a bartender or like the employer of the bartender is responsible if if a bartender gives too much alcohol to one person and the person drives off and gets into the accident um because of that bartenders are held um to super high standards and they try not that's why a lot of bartenders won't give extra alcohol to someone who's extremely inebriated yeah i think that's that's exactly right i mean maybe we could have better training right or better controls over what it is that they're doing i'm seeing a couple of helpful comments in the chat you know uh kalyn says why don't we just discourage drinking right even in onshore leave right we could have a greater level of punishment by the coast guard that might discourage this behavior from from from from from taking place or michael says look why don't we try to figure out a way to you know acknowledge that he had a problem coming into the ship there was a guard there and if you see someone like this train the other sailors to escort him over to his bunk so that he doesn't do something stupid on the way through um kelsey one other consideration we should ask however is whether or not there's anything ira bushi might have been able to do to prevent this problem from occurring because if ira bushi is the party that could conceivably take the easier precautions maybe they should be the one that should be responsible for the damages and we'll give them incentives to do better next time around well i'm not sure what to say because they hired the us government for to handle their ship and i don't know anyone who who'd be like or the coast guard um i don't know who'd be more reliable to handle ships than um the coast guard okay so you'd say well the coast guard was in now the the dry dock owner though controlled the property around the dry dock including the valves that's the semen turned yeah i don't know yeah abby's got an idea abby says why don't we put locks on the valves right um who's in a better position to put locks on valves the dry dock owner who owns the valves or you know or the coast guard and so there's i think a little bit of an argument that might say well do we really want a test this broad because maybe it means that then ira bushi and the various dry dock owners of the world might not take precautions that they would otherwise be interested in taking in order to minimize the damages now the judge actually has a pretty interesting footnote in this case that says um you know what it may be even if the case comes out the way that it does um the coast guard would encourage dry dock owners to take put locks on the dr on the dry dock valves because they know that they're going to be responsible under under the outcome of this case so um it's a little bit of an interesting question and i think it comes down to what's going to be the easier and more likely result that's going to lead to that but at the end of the day the court here kel saying thank you i'll let you go at the end of the day the court here says um we are going to hold the um uh the coast guard responsible um it's interesting uh i guess also to note uh how the two courts the lower court and the um appellate court differed in the result that they reached because they they both agreed that the coast guard should be responsible but from a jurisprudential manner they did it in slightly different way and i just want to kind of call your attention to that in the case um in the uh lower court opinion the the the trial court said um i am going to totally reconsider the policy behind this rule and i don't think the policy makes much sense anymore and therefore we're gonna jettison the rule and hold employers responsible they've got perhaps deeper pockets they're gonna be you know on the hook for these types of problems and the appellate court judge friendly said can't do that we've got to follow precedent there's some precedent here limiting the liability of principles under these types of situations but friendly then went on to adopt a slightly different test i think friendly felt like it wasn't going to be very easy to say lane had a purpose to serve was trying to serve the employer during the valve turning so friendly changed the test he said it's foreseeable and he took a sort of a broadly broadly approached abroad approach to the foreseeability test and basically reached the same outcome by changing the legal standard that was going to be used in a way that wasn't entirely inconsistent with precedent it was just much more of a a secondary or a lesser used approach to evaluating this scope of employment okay we've got a few minutes left i want to ask one other question just because the case came out this way doesn't necessarily mean the law is right so we have a standard that says under certain circumstances um you might be legally responsible for the acts of your agent but it doesn't mean that the law has to be that way and a lot of what you'll do in law school is try to evaluate the law once you've sort of figured out what it currently is so i want to just sort of explore whether or not it's possible that the law in this specific area might be wrong and you know we might take it on this way let's imagine that i own a fireworks store i'm you know i own a chain of geisis fireworks and um there are three possible legal regimes or three possible worlds that we could live in here's world number one we have a world where the principal is never liable for the torts of her agent the principle is never going to be liable for the torch of the agent if the agent commits a tort let the let the agent pay for the damage but the principle is never going to be liable so in the fireworks context i'm never going to be liable for any torts of the employees within my fireworks empire let me invite anybody who wants to comment on whether they'd like to live in that world or not to go ahead and pop up on the screen or to share your audio and video is this a world you'd like to live in where the principal is never liable for the torts of her agent how is that going to incentivize me to behave how is that going to incentivize you know the store to behave any thoughts or comments hi yeah hi welcome i think that um for an employee standpoint it would be a very bad world to live in because i think people would be less likely to take jobs with more risks if they feel like they're going to be liable and um it's going to be hard for employees lower down to be able to pay for whatever damages might happen so i think it's not it doesn't fully make sense because if something does happen and the employees are liable and they don't have the funds to pay then like what happens so there are at least two different parties that might be affected by maybe three if you consider my incentives um from the employees standpoint uh i'm not sure it's gonna make a huge difference right because if the employee does something stupid they're gonna be liable anyway under our current regime right i mean so either way i think the employee is going to be responsible maybe um you know it might be a matter of of is there going to be enough to recover let me ask it this way um would you like to shop in a store like this under a world where the principal is never liable for the torts of her agent no because you can't be insured um that you're going to be reimbursed you might you might worry about the possibility of getting reimbursed if something really bad happens because maybe the employees aren't going to have deep enough pockets that's that's possible you might also worry about the rules that i'm going to put in place in a system like this go ahead smoke on the job if you want right who needs fire extinguishers it's never going to come back to haunt me and you know in a world like that i i do think that we might not feel that there are going to be great incentives in place caitlin what about this world um the principal is always liable for torts committed by her agent no matter what any tort that an agent ever does once you have an agency relationship you're going to be responsible for it is that a good legal rule i think it can cause issues in the sense that there will be less incentives to like grow your company um and to be efficient and there might be too many rules and regulations put in place but like that's not necessarily always a bad thing either yeah i might worry a little bit about that i mean if we want to um promote expansion of at least some commercial endeavors and to sort of help grow the economy a rule like that might make some of us a little nervous right because um just because you happen to hire an employee um it's not obvious right or it might make you nervous if everything they ever do down the road is going to be something that you might um then be responsible for yourself so you know the law attempts to sort of uh impose this this middle ground we're going to try to set up a general compromise the principle is going to be liable for torts of the employees but only if they're acting within the scope of the duty and and the you know if they're acting within their agency relationship trying to either fulfill the purpose of their their role or to serve the employer or maybe if they're you know their bad behavior was foreseeable but the goal of course is to say we want to try to hold employers principles accountable for some of the wrongs that happen in relationship to um to the business endeavor but not everything so that they won't be chilled from in certain circumstances um uh hiring hiring various types of employees to try to try to grow their endeavor i'll let you go thank you so at the end of the day i think what we can say is that um legal treatment in this area turns on some real subtle distinctions i mean think about the various elements we've talked about both to establish an agency relationship and also to establish liability for the principal in in a respondiac superior case these subtle distinctions might seem funny to you now why should they matter and these are the types of things that can drive non-lawyers crazy right we're trying to draw some lines between one type of legal treatment and another but it matters and this in part is how you're gonna be spending uh much of your next year in law school learning about what really matters and then arguing whether or not it should that's the second important part of of of your legal education because the law is not static we see in the ira bushy case that it's changed and a lot of what you're going to be doing is not only understanding what the law currently is but having a robust discussion about whether it's um optimized or whether we should consider making some changes along the lines of what we've just done with this fireworks store regime all right well we've run out of time thank you so much for uh joining me today and i really hope that i'll see you here in the fall i can't wait to get back in the classroom and i hope to see many of you uh in person in the fall i'll go ahead and stick around for a few minutes in case you have any questions about these cases or these classes otherwise thanks again for joining i'll let you go and be sure to join our next session coming up at about 11 30. thanks everyone

2021-04-04 17:20

Other news