WEEK 8

2. As a small-business owner, you are faced with rising costs, particularly employment costs, insurance, et cetera. 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? Why or why not?

· Explain Agency law and the implications of Agency law that apply in this situation. Describe at least one (1) way the company may be able to cancel or return the order in question.

· When is a business liable for the employee's actions? Please use legal language to demonstrate your understanding of liability and the textbook learning to answer this question.