Question

Chris was the agent in charge of distribution and collections for Nothing But Cheese Store. Jacob operated a grocery store and purchased cheese from Nothing But Cheese Store. Chris made false invoice sheets, showing delivery to Jacob of greater quantities than Jacob actually had ordered or received. Chris collected money from Jacob on the basis of these increased amounts, and then kept the overcharged amount herself. When Jacob figured out what was happening, he sued Nothing But Cheese Store for the excess payments he had made. Nothing But Cheese Store claimed that Chris was not its agent relative to her criminal behavior.

What is a court likely to decide? Why would Jacob want to sue Nothing But Cheese Store instead of Chris? Can Jacob sue Nothing But Cheese Store without suing Chris?

Answer 1

This problem relates to employer's liability for employee's act.

PART- A

Chris was the agent of distribution and collection for Nothing But Cheese Store. Thus he was an employee of Nothing But Cheese Store..

The employer can not be held liable for the criminal behavior of the employee, as criminal conduct is outside the scope of employment. However,if employer knew about the past criminal conduct of the employee(if any) or hired him without proper background check ,then he can be held liable for employee's action.

So, the court will decide the Nothing But Cheese Store's liability on the fact whether he knew about the criminal conduct of Chirs. If Nothing But Cheese Store did proper background check before hiring Chirs and was unaware about his criminal behaviour ,the court will not held Nothing But Cheese Store liabile for Jacob's loss.

PART-B

Jacob would want to sue Nothing But Cheese Store because he was dealing with them and not their employees. He felt that if employer gets profit out of good conduct of the employee then employer should also be liable for employee's bad conduct. So employer has legal liability for the behvaior of their employees but this does not include criminal conduct.

PART-C

Jacob can sue Nothing But Cheese Store for the poor behaviour of Chris but not for his criminal conduct. Here, as Chris's intent was to fraud so Nothing But Cheese Store can not be sued for Chris's conduct.So, Jacob should sue Chris and not Nothing But Cheese Store.