Business Law: Liability

  One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort). Please explain whether or not you think the business is liable for the acts under the principles of agency law. The scenario is below:

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• An entrepreneur decides to open up his own car-for-hire business, and creates an app allowing anyone to connect with people who need a ride.  The passengers pay the entrepreneur, who in turn pays a percentage to the driver.  Other than the app, the entrepreneur has no other involvement between the driver and the passenger.  One night, a driver who is intoxicated picks up a passenger and then gets into an accident, and the passenger is severely injured.