Dr. Stevens And Dr. Mercer: Principal Agent Relationship

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There are several factors that must be addressed to determine agency relationship, vicarious liability and employee relationship. In the case, of Dr. Stevens and Dr. Mercer, an agency relationship begins when Dr. Stevens leased office space to Dr. Mercer given him expressed authority to purchase supplies on her behalf. A principal-agent relationship is formed when a person or firm is represented by another in business affairs with third parties (Liuzzo, 2013). The classes of agents are General agent, and Special Agent. A general agent is authorized and have complete authority to act on behalf of the principal agent in all business matters. A special agent has specific limits on the scope of his or her authority. They are delegated to act only in a specific transaction (Liuzzo, 2013). For example, I am an independent insurance agent authorized to market and enroll consumers in United Health Care health …show more content…

Stevens gives the agent (Dr. Mercer) express authority to purchase supplies for the principal. Dr. Mercer was given implied authority. Express authority can be oral or in writing given by the principal agent. Implied authority is the authority that an agent assumes that he or she has related to the express authority given by the principal agent (Liuzzo, 2013). I think that Dr. Stevens should be liable for the supplies because she entrusted him to make purchases for her. She also, failed to monitor and approve all orders.
Although Dr. Stevens and Dr. Mercer operated in the same building, and the sign displayed both of their names on the sign, Dr. Stevens is not liable for the patient injury’s. There was no partnership agreement, and they operated separate practices with their own lists of patients. This patient has assumed liability on both parties, but Dr. Mercers is the only person responsible for damages caused. Since Dr. Mercer terminated the lease without proper notice, he could be liable for the remainder of the

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