What You Need to Know About Agency Law

By: Sach Oliver, Trial Attorney/Managing Partner

With Thanksgiving, Black Friday and Christmas approaching we can all expect the usual holiday shopping spree to start picking up. These are times of celebration, but they can also present legal dilemmas. The hustle and bustle of shoppers along with the increased traffic can create hazardous situations in the workplace.  Employers are some that are most at risk in this holiday season. One possible pitfall is premise liability, which we have discussed before. Something just as important though is the law of agency. Before getting into the details of it, the general idea of the law of agency is to decide when an individual is acting on an employer’s behalf. When they are the employer can be held liable for their actions. So, knowing what makes someone your agent can be vital to making sure you limit your legal liabilities.

In any agency case there are at least three people involved: (1) principal, (2) agent, and (3) a third party. Here, the principal would be the employer and the third party would most likely be a customer or separate business, like a moving company, that is working with the employer’s business. Arkansas law has two essential elements to determine when an individual becomes an agent: (1) an agent has the authority to act for the principal; and (2) the agent acted on the principal’s behalf and under the principal’s control. The most common way an individual becomes an agent is contractually. A cashier, delivery driver, shelf stocker, and door greeter are examples of occupations that have contracted with the principal to act with their authority and on their behalf. An employer can already expect to be held liable for a contracted employee’s negligence, but there are less common ways an individual can become an agent.

One such way is known as estoppel. This occurs when a third party relies on a belief that an individual is acting on a principal’s behalf, even if the principal and agent have no prior relationship. Importantly, this only applies if it is determined that it would be unjust to not let the third party rely upon that belief. Imagine that a customer walks into a store and starts talking with someone they believe is an employee and the employer sees this happen but is too busy to deal with it at that moment. Let us then say that these two individuals get into an altercation for whatever reason, and the customer ends up being injured at the hands of the individual they mistakenly believed was an employee. A court could determine that even though that individual was not actually an employee, the employer could still be held liable as if they were his employee. This could be for several reasons. Perhaps the employer is the only party involved that would have enough money to cover the injuries of the customer, or the court could determine that the employer’s negligence prevents them from walking away unscathed.

The law of agency is fact intensive and tricky. Sometimes, one fact about an incident can sway a court’s opinion on whether to hold an employer liable or not. Do not be caught unaware this holiday season. If you have any questions about agency law, or you believe you might have a case involving this type of situation do not hesitate to call us. At Bailey & Oliver Law Firm we have years of experience litigating complex cases and representing clients who have suffered from personal injuries. With our representation, you can rest assured that we will go the extra mile to provide you the legal help you deserve. Our office is located just West of Exit 81 on I-49 in Rogers, Arkansas.  Give us a call at 479-202-5200.

We serve Rogers, Bentonville, Springdale, Lowell, Bella Vista, Centerton, Decatur, Highfill, Cave Springs, Gravette, Pea Ridge, Fayetteville, Huntsville, Berryville, Eureka Springs and all of Arkansas.