Business Law Assignment - Business Law 4 - Agency Law Analysis

This document provides a comprehensive analysis of key concepts in business law, specifically focusing on agency law. The assignment addresses the differences between actual and apparent authority, explaining the legal relationships and agreements involved. It also clarifies the distinctions between agency by estoppel and agency by ratification, providing examples to illustrate these concepts. Furthermore, the assignment explores fiduciary duties within the agent-principal relationship, emphasizing the agent's responsibilities to act in good faith and prioritize the principal's interests. Finally, the document examines the classification of independent contractors, applying the multiple test rules to determine the employment status of an individual, providing arguments for both employee and independent contractor classifications. The assignment is supported by references to relevant legal texts and cases, providing a solid foundation for understanding agency law principles.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Authors Note

1BUSINESS LAW
Answer
1.
There are several differences exist between actual and apparent authority. Under the
actual authority, a legal relationship exists between a principal and an agent by an agreement in
which they are considered as parties. Such an agreement can be made either expressly or
impliedly. It is called express when a resolution has been passed by the board of directors which
permits a director to appoint architects. It is called implied, when the performance of the parties
or circumstances of the case is determined, for example, when an individual is selected by the
board of directors as managing director.
Whereas, apparent authority is such an authority under which an agent seems to appear in
front of others to have as a consequence of definite interpretations or conduct by the principal
anticipated to be acted upon the third party (1).
2.
Estoppel and ratification are very common terms under Agency law. The meaning of
estoppel is that the principal does not compete with the agency relationship, because it helps to
third parties presume that somebody is his agent and the third party contracts with the agent.
Although it has no presence in reality.
Whereas, the meaning of ratification is that if a person who has no authority to serve as
an agent continuously and the hypothetical principle ultimately accepts that agent, an agency
association has been made retroactively. In both the case, the Principal performs similarly but
from the aspect of confirmation, they are different (1).
3.

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According to the agent-principal relationship, the agent must act on behalf of the
principal and perform those duties which are beneficial for the principal. These are known as
fiduciary duties (1). Fiduciary duties are those which are performed by the agent for his principal
in good faith and for the benefit of the principal. Under this duty, the agent must not take any
advantage of a trade prospect without notifying the principal. To avoid a clash, an agent must
notify his principal about his interest in any property and wait for the approval of the principal
(3). It displays that the agent acted in good faith. In Hodgkinson vs. Simms [1994] 3 SCR 377
case it has been stated by the court that the agent must perform those acts which are beneficial
for the agency and principal.
In this case, Ty detected an offer of selling a small fishing camp on a fishing trip. As he
works as an agent in Farley’s Game and Fishing Lodge Inc. thus as an agent of Farley and to
avoid conflict and further legal actions he must inform his Principal.
4.
As per Multiple test rules, an independent contractor pays his tax, premium of insurance
and does not perform his tasks regularly (2).
i. Clayton can claim himself as the employee of Sleep Eze as he signed an agreement
concerning termination with Sleep Eze and he can argue on that point.
ii. Sleep Eze can contend that Clayton paid the rent of his office space, paid his taxes and
worker’s compensation premiums and gave services to Sleep Eze not regularly. Thus,
Clayton is an independent contractor.
iii. As per the conditions, I think Sleep Eze’s argument will become successful because as
per the Multiple Test rule Clayton is an independent contractor as paid the rent of his

3BUSINESS LAW
office space, paid his taxes and worker’s compensation premiums and provide services to
Sleep Eze irregularly.

4BUSINESS LAW
Reference
1. Alexander T, Papadeas P. CANADIAN BUSINESS LAW. 3rd ed. Emond Publishing;
2018.
2. Stafford BE. Riding the Line between Employee and Independent Contractor in the
Modern Sharing Economy. Wake Forest L. Rev.. 2016;51:1223.
3. DeMott DA. Culpable participation in fiduciary breach. InResearch Handbook on
Fiduciary Law 2018 May 25. Edward Elgar Publishing.