BUSINESS LAW You are the chief executive officer for Game Sportz Corporation(GSC
ID: 447484 • Letter: B
Question
BUSINESS LAW
You are the chief executive officer for Game Sportz Corporation(GSC) with the duty to determine the firm's business goals, strategies, and tactics. Felicity manages the daily operations of the firm. Ethan is its marketing executive. Desiree is your creative resource, sometimes sparkling with new game ideas, sometimes fulfilling others. Cody writes and edits the games' manuals on a per-project basis. In light of the agency principles spelled out in the text, answer the following questions.
1) As a chief executive office, you are responsible only to the board of directors. Felicity, Ethan, Desiree and Cody do your bidding to one extent or another. All of you have contact with third parties on the firm's behalf. Who is principal? Agent? Employee? Independent contractor?
2) Ethan negotiates on GSC's behalf a marketing campaign that includes rebates to the firm based on the number of hits to its links on its web site and games. Ethan arranges for the payments to go in to his personal account. When the company learns of this they file suit against Ethan. What remedies are possible? What duties are there on each party?
Explanation / Answer
1. The Game Sportz Corporation is the prinicpal. It is a corporation and as an entity it has the legal capacity to appoint agents to carry out acts on its behalf so as to achieve its goals and objectives.
The CEO, Felicity, Ethan and Desiree are the employees as well as the agents. They are the agents of Game Sportz Corporation as its employees as all of them can enter into contracts on behalf of their agent - Game Sportz Corporation . (It has been given in the question that all of them have contact with third parties on the firm's behalf.) Moreover all of them are agents as employees of the corporation.
Cody is the independent contractor as he works on per-project basis. He will be paid on a per-project basis and will not enjoy other perks and benefits that employees of the firm would be enjoying. Moreover, he will not be subjected to controls that employees are subjected to.
2. In this case, Ethan has breached his duty (as an agent) to the principal. The payments belongs to Game Sportz Corporation and Ethan has wrongfully arranged for the payments to go in his personal account. The payments should have ideally gone in Game Sportz Corporation's account. It is an intentional tort and the possible remedies within the contract and tort law is that the agent will have to refund the entire amount to the principal. Thus, Ethan will have to transfer the rebate payments to Game Sportz Corporation's account. The principal can remove Ethan from the company both as an employee and as an agent.
The duty of Game Sportz Corporation, as the principal, is to compensate the agent as per the agreement, and to indemnify the agent against claims as well as liabilities incurred while discharging his duties.
The duty of Ethan, as the agent, is to act within his scope of authority and to promptly hand over to the principal all receipts, money and cash collected on principal's behalf.
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