It is important for employers to consider whether someone who works for them is an independent contractor or an employee. An employee is a person who is a paid employee for the employer. An independent contractor, on the other hand, concludes contracts with a contracting entity in order to achieve a result, by determining how that result is to be concluded. The difference lies in the degree of control that the client/employer can exercise over the agent. Employees are subject to more control, while non-employees, such as independent contractors, have more freedom in performing their work. A client is not normally liable for criminal acts committed by unemployed agents because the client does not have full control over the nature of the work performed. However, there are exceptions. There may be direct liability if the client has appointed an incapable representative, if the damage results from the non-employee who has not fulfilled a duty of care entrusted to him by the client (a duty of care is an act whose successful performance is so important that if it is delegated to a representative and not performed, the customer is always responsible), and a customer is liable if the non-employee did not take the necessary precautions to perform very dangerous activities. [5] Also, with home insurance, legal liability follows the homeowner anywhere in the world – if a policyholder accidentally sets fire to their hotel room while on vacation, the legal liability portion of their home insurance covers all damage to the hotel. Whenever you breach a contract, you are legally liable for damages. This can be calculated in several ways, depending on the case and the state in which you live. Let`s say you say to your neighbour, “I`ll pay you $50 if you mow my lawn.” The neighbor mows your lawn, and you never pay for it.
You have broken a contract and your neighbour is entitled to compensation for his work. As in the cases described above, your damages may be punitive or punitive, depending on what the court awards. There is no doubt that it can be very costly to be held legally liable for damage caused to others. Fees can add up not only because of the amount you have to pay the person, but also because of the legal fees to argue your case. Insurance can help protect you from intentional and unintentional torts and cover attorneys` fees, damages, and even punitive damages. An employer may also be held liable for a legal principle known as negligent hiring. This happens when the employer does not check criminal history, background or references when hiring a new employee to ensure that the candidate does not pose a potential danger if hired as an employee. An employer may also be held liable and face consequences if they know the employee represents a potential hazard but keep them in the workplace. This is called careless storage. To avoid allegations of negligent hiring or retention, employers should exercise due diligence in hiring employees who have extensive contact with clients and the public (especially if they have access to vulnerable members of the public, visit clients` homes, or have access to firearms) and fire all employees who pose a potential danger.
[9] Legal liability may extend beyond the physical space of one`s property or vehicle. For example, if a company sells products, it is required by law to ensure that the products can be used safely. The business owner is responsible for any injury or loss caused by the product, even after it leaves the store. If you take a close look at almost all liability insurance, you`ll see that “legally payable” is the trigger for coverage. In other words, insurance pays nothing unless you are legally responsible for it. Product liability governs civil actions between a plaintiff and a defendant who supplies defective goods resulting in loss or injury.11 A party is liable if they are held legally responsible for something. Unlike criminal cases, where a defendant could be convicted, in civil proceedings, a defendant only faces liability. Legal liability insurance is the standard on most property and auto insurance policies. For example, in the event of a car accident, the insurance would pay for the repair of the vehicle, as well as for any property damage or bodily injury that the accident may have caused. The liability portion of the policy would be used to repair the fence through which the car passed and the medical bills of the other occupant of the vehicle.
Property damage coverage would pay to repair the responsible party`s vehicle (minus the derived vehicle). Respondeat superior is a legal principle that dictates when an employer is responsible for an employee`s actions. Employers should be concerned about this rule if the employee commits a tort or felony if he or she acted in the course of employment at the time of the incident. The term “field of employment” refers to the fact that an employee performs a job assigned by his or her employer or performs a task that is the responsibility of the employer. In order to examine whether the conduct that led to the incident falls within the scope of employment, it should be noted that economists use the term “legal responsibility” to describe the legal obligation to pay debts. [10] In the business context, there are several methods to mitigate liability risk. For more information, see Company, LLP, LLCs. In addition, insurance is used by businesses and individuals to reduce the risk of potential liability. For example, a grocery store may have commercial general liability insurance. With this insurance, if a customer slips into the product department because the floor is wet, resulting in a broken leg, and then decides to sue the business, liability insurance covers the legal costs associated with the lawsuit.
In addition to covering the costs of the lawsuit itself, the coverage covers all damages, such as the client`s medical expenses and lost wages. This question probably sounds silly. Obviously, a contract is a legal document signed by both parties and agrees to exchange services for money, right? Not necessarily. In fact, the definition of a contract is much broader. Contracts can be oral or written, and both are legally enforceable. Although it is easier to prove a written contract, from a legal point of view, an oral contract is just as good as a written contract. Sometimes even better, because it is clear that all parties knew all the terms of the agreement. Let`s say a person has condo insurance with $1 million in legal liability insurance, a $2 million auto insurance policy, and a $3 million umbrella policy. Then, say, a fire destroyed part of the condominium complex, which popped up in the insured`s unit from a pot on the stove.
The total cost of damage to the remaining units was $2.5 million. The insured`s condominium insurance would cover damage to their own dwelling and legal liability insurance and roof coverage would cover damage to other units. The coverage of the insured`s condominium would cover the first million and the umbrella policy would cover the rest. This coverage is recommended for people with high-quality assets, multiple assets, and those at high risk of being sued. An employer also needs to know how the extent of their liability may change as a result of their representatives` agreements. An agent is a person authorized to act on behalf of another party (usually the principal). As a general rule, a principal is liable for a contract concluded by the agent if the agent was actually or apparently authorised to conclude the contract. Actual authority is an agent`s ability to track and perform certain activities based on the client`s communication and manifestations. An explicit power of attorney is when the principal clearly indicates what the agent is authorized to do, while implied power is based on what can reasonably be assumed that the agent can do on the basis of what the mandator expects of the agent. Explicit authority and implicit authority are the two types of real authority. The second type of authority is apparent authority. This is the case where the actions of a contracting entity reasonably lead a third party to believe that the contractor may act in a certain manner and conclude contracts with the third party on behalf of the principal.
To determine whether an agent is responsible for a contract, the nature of the client must be examined. There are four types of principals. A disclosed principal is known to the third party, and the third party knows that the agent is acting on behalf of that principal. The agent is not responsible for authorized contracts entered into for a disclosed principal because all parties are aware of the contract and who is a party to the contract. An unidentified principal exists when the third party knows that the agent is acting on behalf of a principal, but has no knowledge of the identity of the principal. The agent is generally responsible for contracts concluded for an unidentified principal. An undisclosed client exists when the third party does not know the existence and identity of the client and reasonably assumes that the representative is the other contracting party. In this case, the contractor may be held responsible for the contract. A non-existent principal refers to when an agent knowingly acts for a non-existing principal, such as an unincorporated association. The entrepreneur is liable here if he knew that the customer was not legally capable, even if the third party knows that the customer does not exist. A contractor may also enter into contracts expressly agreeing on liability.
To avoid this, agents should not make explicit commitments in their own name and ensure that the contract is binding only on the principal. A representative may also be liable to a third party if he or she is not authorized to engage a principal. The agent may escape liability in this scenario if the third party knows that the agent is not authorized, if the principal ratifies/confirms the contract, or if the agent informs the third party of his lack of authority. [5] Legal liability means that you pay a financial amount to compensate for any intentional or accidental fault on your part.
