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Limits on Agency Liability

June 17, 2016

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Under the law of agency, a principal is liable for the acts of its agent if the principal gives an impression to a third party that the agent acts or speaks for the principal.
In <em><a href="">Cross v. Supersonic Motor Messenger Courier, Inc</a>.</em>, the plaintiff was injured while unloading supplies from a Continental truck driven by defendant Arturo Canini-Soto. Plaintiff claimed that Continental was vicariously liable for the acts of Canini-Soto pursuant to the principle of “apparent” or ostensible agency.
The First Department found that Canini-Soto worked for Continental pursuant to an independent contractor agreement.  Canini-Soto was required to maintain insurance in an amount dictated by Continental, his delivery process was controlled by Continental, he received payment from Continental for deliveries made, he used Continental’s forms and wore Continental’s uniform, and the truck he drove bore Continental’s logo. Despite all of those facts, the First Department granted Continental summary judgment dismissing plaintiff's claim that Canini-Soto was acting as Continental's ostensible agent, holding that there was no evidence that plaintiff “acted in reliance on the belief that Canini-Soto was a Continental employee, and the Continental logo on the truck and the forms are insufficient to demonstrate that Continental held out Canini-Soto as an employee.”
The decision by the First Department indicates that even if a principal cloaks an agent with apparent authority, to create apparent agency, the principal, and not the agent or independent contractor, must communicate, either by words or conduct, to the third party that the agent has authority to act on behalf of the principal.
Thanks to Gerry Espinoza for his contribution to this post.


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