One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort). Review the scenario below and explain whether you think the business is liable for the acts under the principles of agency law.
A real estate agent hires a handful of local kids to do the landscaping of homes that he is trying to sell. In addition to the general payment, he reimburses them for the cost of gasoline for lawn mowers and other equipment. While mowing a lawn, one of the kids loses control of a lawn mower and it mows down a neighbor’s very expensive collection of lawn gnomes.