Contract “Form” and the Law of Agency
Case Study 1:
Having throughly examined the elements necessary to ensure a legally binding agreement has been reached, we must still look at the “form” that some contracts must take to be legally enforcible. These issues sometimes defeat the ability to enforce what otherwise appears to be a perfectly valid agreement. We then move into the area of law known as Agency. A very critical part of the law of Agency is being able to tell the difference between an “Employee” and an “Independent contractor.”
You can get a sense of how crucial this is by taking a look at the brief youtube video clip located here:
Questions:
1. List the typical form of agency relationship – either employee or independent contractor – and why you think that is true; and
2. The types of tasks the agent probably would have actual or apparent authority to perform in each of these Principal / Agent relationships below.
a. Certified Public Accountant / Client (taxpayer)
b. Chief Executive Officer (corporation) / Executive Secretary
c. Family Doctor (self-owned medical practice) / Registered Nurse (full-time)
d. Real estate agent / Homeowner wanting to sell
e. Homeowner / Gardener
Case Study 2: Discussion
Sally Rider makes an agreement with Hank Helper to buy a particular race horse for her. Sally asks Hank not to reveal her identity when negotiating for the horse’s purchase. Hank makes a deal with Spirit Stables, the owner of the horse Sally wants. Hank makes a down payment under the terms of a valid contract for the purchase/sale of the horse. Sally, however, later changes her mind and does not provide the rest of the purchase price. Spirit Stables sues Hank Helper for breach of contract. If he loses this lawsuit, Hank wants to hold Sally liable for whatever damages he has to pay in the lawsuit brought by the stables.
1. WHAT REASONS MIGHT SALLY HAVE FOR NOT WANTING HER IDENTITY TO BE REVEALED?
2. CAN HANK HOLD SALLY LIABLE FOR ANY DAMAGES HE MIGHT HAVE TO PAY IN THE LAWSUIT BROUGHT AGAINST HIM BY SPIRIT STABLES? WHY OR WHY NOT?