Contract Case Study – Coleman v Software Inc.

Coleman v Software Inc.

Judgment

Facts

This case involves a dispute between Mr. Coleman and Software Inc. over a matter relating to employment law and agency. Coleman has, for the past 17 years working for the defendant company as a salesperson and marketing agent of security equipment in bars and restaurants. His duties entail traveling to many parts of the country and during these expeditions; he may be gone for as long as 3 months.

The case at hand was actuated by his most recent trip to Smalltown, Colorado in March 2008. During this trip, he decided to buy his wife a present and having entered the mall he stole a ring while still continuing with the shopping. From this point, he proceeded to Jimmy’s Poor Man’s Bar to meet his client, John. Evidence was adduced that Jimmy had never been Coleman’s client though. In the course of his talks with Jimmy about business, he spilled his drink on the floor. Consequently and out of recklessness, he put a pure alcohol grain in his mouth, opened the lighter and blew it. The grain caught fire; hit Jimmy, who died instantly. There were also a few damages caused to the facilities within the premises.

As a result of this, Software Inc. fired Coleman without even giving him audience to account for the loss. It was submitted that this action was contrary to the corporation’s handbook which required that before an employee is dismissed, he has to be interviewed first about the events leading to his likely dismissal. Even after being fired, Coleman purported to make amends for the corporation when he went to John and invited him for a drink. A disagreement ensued between the two and Coleman punched John in the eye causing severe eye damage.

It is the termination of Coleman’s employment contract that actuated the institution of this suit by Coleman before this honorable court.

Issues

This court has been presented with the following issues by both parties which must be dealt with before any determination is made. These are:

1. Whether Coleman was an independent contractor or an agent of the company.
2. Whether Coleman’s actions fell within the scope of duty as per the agency relationship.
3. Whether Coleman was wrongfully dismissed from employment.

Ruling

On the first issue, there are a number of factors that must be considered in order to ascertain the relationship between the parties to this case. First, is whether the company had sufficient control over the plaintiff during his endeavours (Munday 2008). More evidence has to be gathered so as to prove this factor. Secondly, is how the plaintiff had integrated with the workers and the company at large. This too has not been addressed in the submissions of both parties. Another fundamental test that will be relevant to this case is the business test. Who is the greatest beneficiary of the dealings of Mr. Coleman? In the case of Marketing Investigation Ltd v Minister for Social Security,[1] the court asserted that it is prudent to determine whether the worker is in the business on his own account. Considering the last test, I can safely proclaim that this was a contract of service and Coleman was an agent of the Company.

Coming to the second issue, the actions of an agent have to be in conformity with the authority conferred upon him by the principal. If an agent acts ultra vires these instructions, the principal may decide to disown the deeds that he never authorized (Gregory 2001). But there is also the agency principle of ostensible authority which confers upon an agent the power to perform any actions that are antecedent to the kind of task he is carrying out. In these respect, the principal is bound by the agent’s actions whether he later ratifies them or not.

About the legality of the company’s actions to dismiss the plaintiff from work, it is a conspicuous constitutional principle that every person has a right to a fair administrative action. This position was equally reflected in the handbook of the company which allowed for a chance for an interview before an employment contract is terminated. I have ascertained before that the plaintiff was indeed an employee of the company and thus he could neither be accorded differential nor preferential treatment from other employees (Bell 2006). Regardless of the reasons for dismissal, the procedure was flawed and only this entitles the plaintiff to damages for wrongful dismissal.

John & 2 others v Software Inc.

Judgment

FACTS

A brief set of facts of this case indicate that Mr. Coleman, an employee of the defendant company went to Jimmy’s Poor Man’s Bar to meet his client John. Evidence was adduced that Jimmy had never been Coleman’s client though. In the course of his talks with Jimmy about business, he spilt his drink on the floor. Consequently and out of recklessness, he put a pure alcohol grain in his mouth, opened the lighter and blew it. The grain caught fire; hit Jimmy, who died instantly. There were also atrocious damages caused to the facilities within the premises.

The plaintiffs insist that all these actions occurred during the course of employment of Coleman and that the Corporation should take the responsibility for the damages caused.

Issue

There is only one issue that emerges from the facts given in this case. The big question is whether the company can be held accountable for the negligent and criminal conduct of their employer if the acts happened during the course of employment.

Ruling

The greatest determinant of whether a principal can be vicariously liable for offences committed by their agents is whether the offences were committed while the agency relationship was still subsisting. As it has been explained in the above cases, Coleman caused disruption in the bar while meeting his client John. This suffices to apportion Criminal liability to a principal as was illustrated in the case of E v English Province of Our Lady of Charity[2] where the judge pronounced that it is absolutely logical to hold an employer accountable for the evils of their employee so as to make them more cautious while recruiting and also, because they are the ones who control the means of production. In this respect I hold the company liable for the damage caused by its employee and also for compensation of the deceased’s family.

Jewelry Store v Software Inc

Judgment

Facts

The plaintiff, a shop dealing with the business of selling jewelry instituted these proceedings against the defendant company for the wrongful conduct of the former’s employee. The evidence adduced indicates that during his course of duty, Mr. Coleman, an employee of the defendant company stole a ring from the plaintiff’s shop and thus the company should be responsible for the misdeeds of their employee.

Issues

The biggest contentions that have been presented before this court are:

1. Whether the Coleman’s actions were done during the course of employment and if they fell within his scope of duty.
2. whether an employer or principal can be liable for the criminal conduct of the agent or employee

Ruling

On the first issue, an agent’s actions have to be in conformity with the authority conferred on him by the principal. Going by Coleman’s terms of employment and previous dealings with the company, he could be away even for three months according to the nature of his work. Also, his work entailed meeting clients and prospective clients of the company. Therefore, his scope of duty was too wide that everywhere he went, there was a potential client. In that case, all the wrongs committed were done in the course of his employment (Barnett, Scroppe & Law Society 2008).

Secondly, what determines whether a principal can be vicariously liable for offenses committed by their agents is whether the offenses were committed while the agency relationship was still subsisting. As it has been explained in the above cases, the offenses were committed during the course of employment of the employee. Criminal liability can also be squarely apportioned to a principal as was illustrated in the case of Various Claimants v Catholic Welfare Society & 2 others[3] in which Lord Philips stated that vicarious liability could also extend criminal acts of sexual violence and this liability can be found even if the act complained of was contrary to the terms of employment stipulated by the employer. Therefore, the defendant company is liable for the value of the ring.

References

• Munday, R. J. C. (2008). Agency: Law and principles. Oxford: Oxford University Press.
• Gregory, W. A. (2001). The law of agency and partnership. St. Paul, Minn: West Publ.
• Huffcut, E. W. (1999). Elements of the law of agency. Washington, DC: Beard Books.
• Bell, A. C. (2006). Employment law: Textbook series. London: Sweet & Maxwell.
• Barnett, D., Scrope, H., & Law Society (Great Britain). (2008). Employment law handbook. London: Law Society.
• Gruner, R. S. (2007). Corporate criminal liability and prevention. New York, N.Y: Law Journal Press.

[1] [1969]2 QB P173

[2] [2013] 2 WLR 958

[3] [2012]3 WLR 1319

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