Question

You and Winnie and Ralph are discussing GC's plan to hire George Tacy as an agent for recruitment and hiring cleaning employees. You all recognize some possible risks associated with agency agreements.

1. What are some risks and liabilities that GC could face that would be associated with the agency contract between GC and George Tacy?

2. What are possible consequences of each of those risks and liabilities?

Answer 1

1. Some possible risks and liabilities that GC could face that would be associated with the agency contract between GC and George Tacy:

A. GC could be held liable for any misconduct on part of Tracy since the law has provision for the agent to hold the principal accountable for any mishappenning between both parties.

B. Failure in contract performance: GC could potentially be impacted if at any point during Tacy's contract, there is any failure in her performance. Monetary loss arising out of this cannot be put on Tacy and GC has to bear all the loss since Tacy is acting on part of GC.

2 Possible consequences arising out of these risks and liabilities:

A. Bad image: GC's image in the market could be spoilt if any legal action is taken by Tacy due to any mishappenning between the company and Tacy

B. Monetary loss: GC could have to pay indemnity amount to Tacy if Tacy claims such amount and it gets proved in court. In such a case, there is a potential monetary loss to the company.

C. Stressful environment: There would be a stressful environment in the company and other employees performance will also be affected if any negative relationship is formed between the company and Tacy.