Ch 20

How the Courts Determine Employee or Independent Contractor Status.

-How much control does the employer exercise over the details of the work? -Is the worker engaged in an occupation of business distinct from that of the employer -Is the work usually done under the employer's direction or by a specialist without supervision -does the employer supply the tools at the place of work -For how long is the person employed -What is the method of payment by time period or at the completion of the job? -What degree of skill is required of the worker?

two situations in which the courts may find an agency relationship in the absence of a formal agreement.

-In family relationships -in emergency situations

two situations in which an agency relationship is unenforceable.

-Ones created for a purpose that is illegal -ones contrary to public policy

four typical duties that the principal has to the agent.

-compensation -reimbursement and indemnification -cooperation -safe working conditions.

five duties the agent owes the principal.

-performance -loyalty -obedience -accounting

agency

A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).

Which of the following is NOT one of the four ways in which an agency relationship can arise?

Agency by federal law

fiduciary

As a noun, a person having a duty created by his or her undertaking to act primarily for another's benefit in matters connected with the undertaking. As an adjective, a relationship founded on trust and confidence.

When a person who is not an agent makes a contract on behalf of a principal, the principal cannot benefit from the contract.

False

The agent has the right to be compensated, to be reimbursed and indemnified, and to have a safe working environment. What other right does the agent also have in performing his agency duties?

No interference by the principal

independent contractor

One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. An independent contractor is not an employee but may be an agent.

Agency relationships can exist outside an employer-employee relationship, and thus agency law has a broader reach than employment law does.

True

Federal statutes governing employment ___ apply only when an employer-employee relationship exists.

discrimination

Protection under employment-discrimination statutes provides a significant ___ for workers to claim that they are employee rather than independent contractors.

incentive

Facts and circumstances must show that an ordinary, prudent person familiar with business practice and custom would have been ___ in concluding that the agent had authority.

justified

Whether a worker is an employee or an independent contractor can affect the employer's ___ for worker's actions.

liability

Louisa is moving from New York to Los Angeles. Grover agrees to act as her agent to sell her New York apartment. As her agent, Grover owes Louisa all of the following duties EXCEPT:

payment

It is the deeds or statements of the ___ that create an agency by estoppel.

principal

For an agency by estoppel, the third person must prove that he or she ___ believed that an agency relationship existed.

reasonably

If the Internal Revenue Service decides that an employee is misclassified as an independent contractor, the employer will be ___ for paying Social Security, withholding, and unemployment taxes.

responsible