How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask BartEsq Your Own Question

BartEsq
BartEsq, Researcher
Category: Legal
Satisfied Customers: 1506
Experience:  Juris Doctor
Type Your Legal Question Here...
BartEsq is online now
A new question is answered every 9 seconds

I am managing member of a sole-proprietor LLC incorporated

Resolved Question:

I am managing member of a sole-proprietor LLC incorporated in New York City. I am contemplating entering into a revenue sharing agreement with an independent professional to distribute a product owned by the company. Would it be acceptable for the company to provide the individual (who will not be an employee) with an e-mail address on the domain name of the company while he is marketing the product ?
Submitted: 1 year ago.
Category: Legal
Expert:  BartEsq replied 1 year ago.

BartEsq :

Welcome! Thank you for using JustAnswer.

BartEsq :

My name isXXXXX going to try and help.

BartEsq :

It is acceptable. But you need to be concerned with the law of agency.

BartEsq :

By giving an independant contractor an email address with your LLC, you might be setting yourself up for a claim based on the contracting party percieving the independant contractor as your agent.

BartEsq :

The different scenarios are many and complex. But I can try to find a good resource for you to better understand agancy law if you like.

BartEsq :

agency*

BartEsq :

http://www.rotlaw.com/legal-library/what-is-the-law-of-agency/ Actually, here is a very good summary of the agency law and the different ways an agency relationship can be created.

Customer:

I think I get the sense of it - so basically having the contractor using company e-mail gives ground to the argument that he is acting on behalf of the company ?

BartEsq :

Correct.

BartEsq :

Because many times the claim is based on the other party's perception that the contractor is your agent.

BartEsq :

And the email could further that belief.

Customer:

In this case, I think there are other elements that position him as my co's agent

BartEsq :

Indeed. The contractor can always get his own domain name and set up a unique email.

Customer:

Our initial thought is to be quite open about the fact that he will be actively looking for commercial opportunity linked to the co's product

BartEsq :

Disclaimers also work well.

Customer:

Is the point to protect the company if he were to make any errors ?

BartEsq :

Errors, breach of contract, ect. You just dont want someone to sue you also for something that would otherwise be the contractor's problem.

Customer:

Does the fact that the company have a revenue-sharing agreement with the contractor in itself not position it by default as an agency relationship ?

BartEsq :

No, that is between you and the contractor. Agency invloves three parties. You, the agent, and the principle, ie, cusotmer, ect.

BartEsq :

Well, you are actually the principle, the contractor would be your agent, and then the third party.

BartEsq :

To limited your liability, you want to make sure there is no appearance the contractor is your agent. Otherwise, the contractor can bind your company to agreements and contracts.

BartEsq :

Kind of defeats the purpose of using an independant contractor.

BartEsq :

But you are free to use the contractor as an agent if you want.

Customer:

I hear you, but nonetheless a status that is lawful and accepted. If I understand correctly, the agent is very similar to an employee.

BartEsq :

Correct.

BartEsq :

But even an employee can not be an agent. Like a cahier at wal mart cant bind the compnay in contracts.

BartEsq :

So agency law stands alone but independant contractor versus employee is a factor.

BartEsq :

That is why many claims are based on the complaining party's perception.

BartEsq :

And by using your company email, it ads to the perception that the contractor is an agent or employee. Not decisive but a factor.

Customer:

Perfectly clear, thank you. Now in case the company gets dragged down into contention with a client due to the contractor error, is the only recourse of the company to turn back to the contractor - effectively facing the client in potential litigation ?

Customer:

Not an ideal scenario, since errors can sometimes be costly and individuals can easily argue they don't have the financial means to face the liability

BartEsq :

You dont have to turn your back on the contractor, just deny liability to the customer.

BartEsq :

The client would have to establish agency.

Customer:

right understood, that is the first line of defense. But if they did.

BartEsq :

Well, you could avaluate your relationship with the contractor to see if any changes need to be made in operating procedures but no need to turn your back completely unles the contractor did something egregious.

BartEsq :

evaluate*

Customer:

understood, as always though before getting into a venture I would like to understand my liability in the event of a disaster scenario.

Customer:

so indeed if he did something reckless. Will I/the company pretty much be left on the hook ?

BartEsq :

No. You have a pretty good line of defense. But I cant see what claims could caome your way.

BartEsq :

come*

Customer:

I think you lost me there. You mentioned it was a clear possibility, if the contractor was perceived as an agent, and made an egregious mistake, the client may turn against the company. Are you now saying they can't ?

BartEsq :

He is an idependant contractor. That is good for you. Would be better to have him get his own domain name email. But it is still ok using yours. But he should make it clear he is an independant contractor to avoid perceptions of agency.

BartEsq :

Yes, they can, there is a difference between someone trying to sue you and winning.

Customer:

I think you lost me there. You mentioned it was a clear possibility, if the contractor was perceived as an agent, and made an egregious mistake, the client may turn against the company. Are you now saying they can't ?

BartEsq :

Anyone can try to sue you for just about anything. That doesnt mean they will win.

Customer:

I hear you - you recommend using disclaimers though ?

Customer:

Are they pretty much standard disclaimers ?

BartEsq :

Sure, cant hurt. Just want to make sure whoever the contractor is doing business with understands he is not an employee or agent.

Customer:

Understand - thanks. Should I get an attorney to draft a disclaimer or are they so standardized that I could source it online ?

BartEsq :

Im sure you can find something online but you are always free to hire an attorney. You just want to make sure that clients have some type of notice that the contractor is not an employee or agent.

BartEsq :

Avoids the whole percieved agent scenario.

BartEsq :

Without anything else, I would personally think your contractor was an agenct or emplyee using your email domain.

BartEsq :

That is what you dont want.

Customer:

Yes. The caveat is that in the disaster scenario, I would have had no ways of enforcing the disclaimer to be sent.

Customer:

So typically a protection might work best when I don't need it

BartEsq :

Have your contractor make clear to clients he is not an agent or employee. Especially if he is using your domain. Otherwise, have him get his own domain email.

Customer:

Understood. Thank you very much for your help.

BartEsq :

No problem. Any other concerns?

Customer:

No we are all set. Many thanks for your help today.

BartEsq :

My goal is to provide you with excellent service. Let me know if you have any questions. If I can provide you with any additional service, please don't hesitate to ask. Please remember to rate my service so I can get credit for my work. Bonus is not mandatory but much appreciated. Thank You.



You can request me directly by putting “To Bart” at the beginning of your question or clicking on my profile link here: http://www.justanswer.com/law/expert-bartesq/

BartEsq, Researcher
Category: Legal
Satisfied Customers: 1506
Experience: Juris Doctor
BartEsq and 15 other Legal Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.