Module 6

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Feb 20, 2024

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Module 6 Chapter 40 Question 2: Jerome, Sheila, Gary, and Ella agreed to purchase a tract of land and make it available for use as a free playground for neighborhood children. They called the enterprise Meadowbrook Playground. Jerome and Gary improperly hung one of the playground swings and a child was injured. Suit was brought against Meadowbrook Playground. Can damages be recovered? In this case, three people (Jerome, Sheila, and Gary) purchased a land to make into a free playground. They called the enterprise, Meadowbrook Playground. As a result of improper installation of a swing, a child was hurt. The child’s authoritative figures brought suit against the enterprise. The relevant law in this case is Unincorporated Association. “An incorporated association is a combination of two or more persons for the furtherance of a common purpose,” governed by contract law. Furthermore, “an unincorporated association cannot be sued in its own name”, (Twomey, et al, pg. 810) as well as the members of that association are not legally responsible for the debts or liabilities of the association just by mere membership. Based on the facts and laws present in this case, damages cannot be recovered. The Meadowbrook Playground was an unincorporated association, it did not have a legal standing. Hence, it or its members cannot be sued or deemed liable in this case. Question 6: A woman claimed that she was sexually harassed by a male coworker at the franchisee’s pizza store. She sued not only the harasser and the franchisee but also the franchisor, Dominos, claiming that the franchisor was the employer of those working for the franchisee and that the franchisee was the agent of the franchisor. The court recognized that the franchisor exerted control through “comprehensive and meticulous standards for marketing its trademarked brand and operating its franchises in a uniform way.” Was Domino’s vicariously liable for the conduct of the franchisee’s employee? In this case, a female employee claimed that she was sexually harassed by her coworker at the work place. She sued her coworker, the franchisee, and the franchisor. (Dominos)
The applicable laws in this case are that of Franchise Agreements and Vicarious Liability Claims against Franchisors. This agreement “sets forth the rights of the franchisee to use the trademarks, trade name, trade dress, and trade secrets”. (Twomey, et al, pg. 812) Additionally, it is commonly required for a franchisor to provide training for the employees of the franchisee, including but not limited to processing and repairing training. (Twomey, et al, pg. 812) Vicarious Liability Claims against a franchisor in theory should not hold as a franchisor “is not liable to a third person dealing with or affected by the franchise holder. (Twomey, et al, pg. 815) This is due to the fact that in general, the franchisee is an independent contractor, hence the controls over the franchisee by the franchisor is not express and fixed. The only defense plaintiffs may have against the franchisor is to prove that they are the employers of persons working for the franchisee, and that the franchisee was the agent of the franchisor. (Twomey, et al, pg. 815) Based on the facts provide and the laws applicable, in order to establish vicarious liability, the plaintiff must establish proof that the franchisee is an employee of the franchisor. Without this proof, Dominos could not be vicariously liable for the conduct of the franchisee’s employee. Question 11: Food Caterers of East Hartford, Connecticut, obtained a franchise from Chicken Delight to use that name at its store. Food Caterers agreed to the product standards and controls specified by the franchisor. The franchise contract required the franchisee to maintain a free delivery service to deliver hot, freshly prepared food to customers. The franchisee used a delivery truck that bore no sign or name. Its employee, Carfiro, was driving the truck in making a food delivery when he negligently struck and killed McLaughlin. The victim’s estate sued Chicken Delight on the theory that Carfiro was its agent because he was doing work that Chicken Delight required and that benefited Chicken Delight. Was Carfiro the agent of Chicken Delight? In this case, under the franchise contract, the franchisee was required to maintain a free delivery service to delivery food. The franchisee had no logo of the franchise on the truck. Furthermore, its employee Carfiro struck and killed McLaughlin while making a food delivery. McLaughlin’s estate sued the franchisor on the theory that Carfiro was their agent. The laws applicable are Agency Relationships, and Vicarious Liability Claims against Franchisors. An agent is “authorized to act under the control of and for another, the principal, in negotiating and making contracts with third persons”, including obligations to and rights against third persons. (Twomey, et al, pg. 708) As franchisors are not liable to a third party for the acts of the franchisee unless the negligence occurred under the theory of actual or apparent agency. (Twomey, et al, pg. 815) In order to prove actual agency, facts would have to show that the franchisor exerted a certain level of control over the franchisee. (Twomey, et al, pg. 815) Furthermore, for the to be
apparent, there must conduct or words from the principal to lead a third person to believe that they are an agent. Based on the facts and laws present in this case, there was no apparent or actual agency established. The franchisor did not seem to have much control over the hiring of employees or much else except the free delivery service. Additionally, the delivery truck had no logo that would lead a third person to believe that it was a Chicken Delight truck. Hence, Carfiro could not be an agent of the franchisor, Chicken Delight. Chapter 41 Question 12: Leland McElmurry was one of three partners of MHS Enterprises, a Michigan partnership. Commonwealth Capital Investment Corp. sued the partnership and obtained a judgment of $1,137,284 against it, but the partnership could not pay the judgment. Commonwealth then sued McElmurry for the entire det on the theory that, as a partner of MHS, he was liable for its debts. What, if any, is McElmurry’s liability? In this case, Leland McElmurry was one of three partners in a partnership. The partnership owed money to Commonwealth Capital Investment Corp. and was unable to pay. Commonwealth Capital Investment Corp consequently sued McElmurry. The applicable laws in this case are Partnership, and Partner Liability. A partnership is “a relationship created by the voluntary association of two or more person to carry on as co- owners a business for profit”. (Twomey, et al, pg. 825) The partners would also be equally liable for the liabilities and duties of the partnership. Furthermore, certain characteristics must be fulfilled for a valid partnership agreement. - “Partnership must be voluntary and consensual “ - “A partnership involves partners contributions of capital, services, or a mix” - "The partners are associated as co-owners to transact the business of the firm for profit. (Twomey, et al, pg. 826) Furthermore, partners are “jointly liable on all firm contracts. They are jointly and severally liable for all torts committed by an employee or one of the partners in the scope of the partnership business.” (Twomey, et al, pg. 835) Based on the facts and laws present, McElmurry is individually liable for the debt. This is because given that the partnership did not have the money to pay, Commonwealth Capital
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