Arnold is the chief executive officer of Beta Corporation. Arnold's responsibilities include decisions on product development, marketing, and other significant business directions. Arnold is subject to the approval and oversight of Beta's board of directors. Carol is a Beta manager whose duties include the firm's day-to-day hiring, firing, purchasing, and selling. Dave is a Beta salesperson, whose daily activities are controlled by Carol. Erin writes technical manuals for Beta products according to Arnold's instructions and subject to Beta's control, but has no dealings with Beta customers or suppliers. Fred edits the manuals on a contract-per-manual basis and is not otherwise subject to Beta's control. Who is a principal? Who is an agent? Who is an employee? Who is an independent
contractor?
What will be an ideal response?
Beta is a principal. Arnold, Carol, Dave, and Erin are Beta agents and employees. Fred is an independent contractor. In an agency relationship, an agent agrees to act for or on behalf of a principal. An agent is subject to the control of the principal. An employee is subject to the control of employer. An independent contractor is not subject to an employer's control. A corporation is a "person" who has contractual capacity but who can act only through its agents. Beta, as a corporation, is acting through its agents. Arnold, Carol, Dave, and Erin act on behalf of Beta, from which they obtain their authority. This authority differs: Arnold, Carol, and Dave can bind Beta in certain ways in their dealings with third parties, but Erin does not have the authority to legally bind Beta. Because Arnold, Carol, Dave, and Erin are subject to the control of Beta, through their superiors, they are employees. Because Fred is not subject to Beta's control with respect to the physical conduct in the performance of his contracts, Fred is an independent contractor.
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What will be an ideal response?
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