Agency Case Problem
LAW001 Business Law 1
Week 16 Assignment
Agency Case Problem
Chapter 32 – Agency
A. Read the case Santiago v Phoenix Newspapers. (Links to an external site.)
B. Study the Whiteboard (Links to an external site.) and
ProfJ video (Links to an external site.)
C. Carefully explain in your own words the following statements below:
The court of appeals agreed, stating that “[p]arties have a perfect right, in their 507 (Links to an external site.)*507 (Links to an external site.) dealings with each other, to establish the independent contractor status in order to avoid the relationship of employer-employee, and it is clear from the undisputed facts that there was no employer-employee relationship created between PNI and Frausto.” Santiago v. Phoenix Newspapers, Inc., 162 Ariz. 86, 90, 781 P.2d 63, 67 (1988) (Links to an external site.). Santiago seeks review of this ruling.
The Restatement lists several additional factors, none of which is dispositive, in determining whether one acting for another is a servant or an independent contractor. We now review those factors, along with the cases considering them, for evidence of an employer-employee relationship which could preclude the entry of summary judgment.
Contract language does not determine the relationship of the parties, rather the “objective nature of the relationship, [is] determined upon an analysis of the totality of the facts and circumstances of each case.”
The fundamental criterion is the extent of control the principal exercises or may exercise over the agent. Central Management v. Industrial Commission, 162 Ariz. 187, 190, 781 P.2d 1374, 1377 (App. 1989) (Links to an external site.); Hamilton v. Family Record Plan, Inc., 71 Ill. App.2d 39, 47, 217 N.E.2d 113, 117 (1966) (Links to an external site.); see also Greening v. Gazette Printing Co., 108 Mont. 158, 165, 88 P.2d 862, 864 (1939) (Links to an external site.) (contract terms between carrier and printer not binding on third party; “[i]f one is injured by the servant of another, it 509 (Links to an external site.)*509 (Links to an external site.) is immaterial to him what the terms of the agreement between employer and employee might be. The liability must come from the fact that the employer exercises control over the actions of the person in his employment.”)
A strong indication of control is an employer’s power to give specific instructions 510 (Links to an external site.)*510 (Links to an external site.)with the expectation that they will be followed.
The jury is more likely to find a master-servant relationship where the work does not require the services of one highly educated or skilled.
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