TO: BossFROM: Your NameRE: Legal Liability and the Gig Economy

Legal Liability and the Gig Economy

The definition of agency law focuses on the interactions between agents and principals, or situations in which one party has the power to act on behalf of another (Loewenstein, 1). The term “agency” refers to a contract either expressly mentioned or insinuated, whereby one party, referred to as the principal, assigns another party, referred to as the agent, with overseeing a company and carrying out transactions on his behalf or in his name. The agent concurs to control of the company and provide a record of his activities.

Principles of Agency Law

Agency legislation enables a person to hire another person to buy property, work, and sell products and services on their behalf. The agent may be given permission to conduct a variety of tasks or may only be permitted to perform a limited number of tasks by the principal. Nevertheless, the agent is under the principal’s supervision and serves to convey his or her concerns, irrespective of the scope of the principal’s power (Loewenstein, 1). More significantly, principals are responsible for the results of the activities they instruct the agent to take. Therefore in the event an accident takes place and an agent is injured in the line of duty, the principal is held responsible. In the said scenario of Widgets ride sharing business, the agency is implied since there is no policy for hiring or checking the backgrounds of the drivers. The drivers however carry out their work on behalf of Widgets. The drivers have severally had accidents and one of them was arrested for drunk driving. Widgets is responsible for all the actions carried out by the drivers. He should therefore pay for the damages caused by the drivers and pay bale for the arrested driver. In his own interest, Widget should ensure that the drivers are not involved in activities such as accidents or drunk driving to prevent him from having to cater for the expenses caused.

Scope of Employment

The law term “scope of employment” frequently comes up in civil litigation, particularly in matters involving workers’ compensation and injury to an individual. The set of tasks and behaviors that a worker is obviously required to execute as part of their work is commonly referred to as the scope of employment (Thornthwaite, 2). The worker must be actively involved in or concerned with the advancement of the boss’s activities or company. Whether a task is carried out on the boss’s property or elsewhere, it may nevertheless fall under the definition of an employment-related task. Individuals who sustain an injury or become disabled while performing their employment are protected by workers’ compensation legislation. In an effort to reduce the frequency of litigation, the statutes offer predetermined payout to the affected workers. Additionally, these rules give insurance to the relatives of employees who pass away from diseases or injuries related to their jobs (Thornthwaite, 2). In this case, there was no policy put in place when Widget was employing the drivers. The drivers have however been involved in accidents in the line of work. Since the accidents took place in the scope of employment when the drivers were working for Widgets, they were entitled to work compensation if any of them got injuries from the accidents.

Agents acting as Employees Vs Independent Contractors

An individual must behave in a manner that demonstrates the necessary control for them to qualify as an agent. Without sufficient control, they will be classified as an independent contractor instead (Redfearn III, 3). The principal is not responsible for the conduct of the independent contractor, although the principal could potentially be responsible for the activities of an agent, which is the main distinction between an agency and an independent contractor. An agent is under the principal’s supervision, but an independent contractor nearly always has complete discretion. Accountability for the agent’s acts is more reasonably assigned to the principal because of the principal’s authority (Redfearn III, 3). An independent contractor mostly has his or her business of his or her own but offers services to the principal on contract basis. The independent contractor in most instances has more than one principal who act as clients to him or her. In this case, Widgets has employed the drivers to work for him in the ride sharing gig business. However the drivers may operate as independent contractors since they may have other principals apart from Widgets.

Agents committing Intentional Tort Vs Negligence

The performer’s mental state is the primary distinction between an intentional tort and a negligence allegation. Even when a negligent individual had no intention of hurting anyone, they could still be made accountable because of the damage they caused. On the other side, intentional torts happen when someone purposefully does something that causes damage to another individual (Yektaei & Suleimani, 4). Numerous intentional torts, such as violence, rape, malicious prosecution, deliberate infliction of distress, invasion of private property and reconfiguration, are acknowledged by the majority states. In Widgets case, if the drivers’ accidents were proven to be due to negligence, any third party who incurred damages and pressed charges would not have a court case. However, the driver arrested due to drunk driving is likely to have a court case against Widgets since it was an intentional tort. The driver knew that drunk driving can cause accidents yet he or she went ahead to drink and drive.

Recommendations to Widgets Business

There are a number of recommendations I would suggest to Widgets so as to limit legal exposure related to driver conduct. First and for most I would recommend that he gets a hiring policy so as to ensure that he hires certified drivers who are up to the task. Widgets should also offer training and workshops from time to time for the drivers. The drivers should also sign a liability waiver claiming that Widgets is not liable to any injuries incurred in the line of business. All these recommendations will reduce the chances of having accidents and the drivers will be more accountable of their actions as they work for Widgets.


Loewenstein, Mark. (2017). Agency law and the new economy. P 1009-1046. Retrieved from, Louise. (2016). Chilling times: social media policies, labour law and employment relations. P 332-351. Retrieved from III, Robert. (2016). Sharing economy misclassification: Employees and independent contractors in transportation network companies. P 1023-1056. Retrieved from, Saeid, and Hassan Alidadi Suleimani. (201)8. Role, rules and place of distinction between intentional tort and negligence tort in tort law. Retrieved from

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