Question

1. Emily is so successful that she cannot keep up with deliveries. She hires Marco’s Movers, another local company, to handle the overflow of deliveries. Emily’s Flowers pays Marco a flat fee per delivery, plus mileage. Is Marco an employee of Emily’s Flowers? What is your reasoning?

2. When Emily turns over the floral creations to Marco for delivery, what type of legal relationship is created? What level of care is required of Marco while the flowers are in his possession?

1. An agency relationship is created when one person acts on behalf of another.

   True

   False

2. An agent is personally responsible for all obligations that she incurs on behalf of her principal

   True

   False

3. A person who finds personal property automatically becomes the owner of that property.

   True

   False

Answer 1

1) No.

Agency is the relationship that is created when a 'principal' appoints another persom to act on their behalf. An agent need not necessarily be an employee of the principal. An agent can also bs a business partner or an entity such as a firm that has been contracted for a particular task.

2)

The type of relationship that has been created between Emily and Marco is called a Principal-agent relationship.

All agency relationship are fiduciary relationships, so a high level of trust and confidence between Emily and Marco is required. Marco is supposed to discharge his duties with appropriate care and diligence, and try his best to deliver the flowers in as good condition as he can.

3) True.

4) False.

One of the duties of the Principal is Indemnification. Thus, the principal is responsible for reimbursing the agent for losses, expenses, and liabilities incurred in the agent's duties.

5) False.

A person who finds a personal property becomes its owner, if the property was abandoned. The owner of the abandoned property must intend to relinquish ownership before a finder can have a claim over the property.

If the property is simply lost or mislaid, the finder must relinquish it once the rightful owner demands it back.