Business Law & Ethics Arnold is the CEO of Beta Corp. Arnold’s responsibilities include making decisions on product development, marketing and other signif
Business Law & Ethics Arnold is the CEO of Beta Corp. Arnold’s responsibilities include making decisions on product development, marketing and other significant business directions. Arnold’s position is subject to the approval and oversight by Beta’s Board of Directors.
Carol is a Beta manager whose responsibilities include directing Beta’s day to day hiring, firing, purchasing and selling.
Dave is a Beta salesperson whose daily activities are controlled by Carol, his supervisor. Dave is authorized by Carol to enter into contracts on behalf of Beta.
Fred works from home to edit Beta’s technical manuals on a contract- per-manual basis (he is paid for each manual he edits), and is not otherwise subject to Beta’s control.
Identify each of the persons below as a principal, an agent, an agent-employee or an independent contractor – and explain your conclusion. For example, is Arnold a principal, agent- employee, or independent contractor and why? If you believe a person can hold more than one status, discuss/explain. BUSINESS LAW& ETHICS 2
Business Law and Ethics
Arnold is an agent.
Legally an agent is a person who has been given duties to act on behalf of another person or entity (Stimmel et al, 2021). Arnold in this case is the CEO of Beta Corp and his position is subject to approval and oversight from the Beta Corp Board of Directors. Arnold has also been given substantial control over Beta Corp. all this responsibility and nature of his work points to him being the agent and the Board of Directors being the principal as they are the ones who have bestowed all that responsibility to Arnold.
Carol is an Agent Employee.
Carol is a manager, whose roles are hiring, firing, purchasing, and selling. Her powers have not come directly from the Board of Directors and therefore an employee of Beta Corp. she is subjected to control by Beta Corp. This is because she is under Arnold’s scrutiny and reports to him about any dealings she is undertaking on behalf of the company.
Dave is an agent employee.
Just like Carol, Dave does not exercise direct authority on the organization from the principal who are the Board of Directors (Stimmel et al, 2021). Dave has been authorized by Carol, his supervisor to enter into contracts on behalf of the organization. This means that Dave is just an employee of the organization excising his powers as given by Carol, another employee and not the principal.
Fred is an independent contractor.
An independent contractor is a self-employed person or entity that is contracted by another person or entity to provide certain services as a non-employee. Fred works from home and is paid according to the number of contracts he edits. The jobs he takes on are not scrutinized by Beta as he is not under their control. Fred is an independent contractor because he directs and controls the result of his work.
Stimmel, Stimmel, & Roeser. (2021). Agency – The Basic Law | Stimmel Law. Stimmel-law.com. Retrieved 30 August 2021, from https://www.stimmel-law.com/en/articles/agency-basic-law.