Roman is the chief executive officer of Salty Snax Corporation. Roman's re-sponsibilities include decisions on product development, marketing, and other significant business directions. Roman is subject to the approval and oversight of Salty Snax's

Question

board of directors. Teri is a Salty Snax manager whose duties include the firm's day-to-day hiring, firing, purchasing, and sell-ing. Umberto is a Salty Snax salesperson, whose daily activities are con-trolled by Teri. Velma writes sales manuals and promotional materials for Salty Snax's products ac-cording to Roman's instructions and subject to Salty Snax's control, but has no dealings with the company's custom-ers or sup-pliers. Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax's control. Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?

Answer 1

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Salty Snax is a principal. Roman, Teri, Umberto, and Velma are the company's agents and employees. Warren 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 sub-ject to the control of employer. An independent contractor is not subject to an employer's control. A corporation is a "person" who has contrac-tual ca-pacity but who can act only through its agents.

Salty Snax, as a corpo-ration, is acting through its agents. Roman, Teri, Umberto, and Velma act on behalf of the company, from which they obtain their authority. This author-ity differs-Roman, Teri, and Umberto can bind Salty Snax in certain ways in their dealings with third parties, but Velma does not have the authority to legally bind the company. Because Roman, Teri, Umberto, and Velma are subject to the control of Salty Snax, through their superiors, they are employees. Because Warren is not subject to Salty Snax's control with respect to the physical conduct in the per-formance of his contracts, Warren is an independent contractor.