The hiring of independent contractors is increasing across the globe, mainly due to the numerous advantages associated with the practice. Employers now rely on independent contractors not only to reduce the cost of labor but also to access specialized skills and to reduce legal risks. Thus, it is important to understand the relationship between the employer and employee or between principal and agents. Conflict is likely to emerge between principal and agent, primarily based on the nature of their relationship and some of the uncertainties associated with their contracts ( Clarkson et al., 2010) . The scenario between James Blatt and Marylyn Scott helps in understanding the relationship between principal and agent, mainly concerning agency formation and duties.
Question 1
The principal in the scenario is James Blatt because he is the person who hires Marylyn Scott to provide insurance sales services to the Massachusetts Mutual Life Insurance company. By definition, a principal refers to a person or an entity who hires an agent to work or his or her behalf ( Clarkson et al., 2010) . The principals always have the legal authority to make critical decisions or take actions that can positively or negatively affect others ( Tumbat & Grayson, 2016) . Thus, Blatt is the principal in this case. Scott, on the other hand, is the agent because he acts on behalf of Blatt. Blatt is an independent contractor who hires Scott as his agent.
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There are four main types of agency relationship that exist between the principal and the agent, and they include agency by agreement, agency by ratification, agency by operations of law, and agency by estoppels ( Tumbat & Grayson, 2016) . The relationship between Scott and Blatt is mainly based on the agency by agreement. According to the information contained in the scenario, there is an agreement that Scott will sell insurance to the Massachusetts Mutual Life Insurance on behalf of Blatt ( Clarkson et al., 2010) . Also, Scott agrees through the expression of consent contained in the contract that she will work on behalf of Blatt. Hence, the agency relationship formed between Scott and Blatt is based on an agreement.
Question 2
Even though an employee or independent contractor may be performing a similar job or work, they are subjected to different terms and conditions of employment. Besides, there are legal differences between an independent contractor and an employee. Therefore, the court is forced to consider many facts before making a final decision on whether Scott is an employee or an independent contractor. First, the degree of control is one of the facts that the court must consider on its deliberations to determine the case. Based on IRS rules and the common law doctrine, an independent contractor should have full control of the manner and means in which the assigned duties or contracted services are accomplished ( Kwak, 2012) . The company has no control over independent contractors so long as they are doing their work as required based on the contract. According to the contract, it can be argued that Scott had full control over her work as a salesperson.
The second fact is concerning the full-time work, as the court must determine whether the contract gave Blatt the right to control and monitor Scott’s time of work. Independent contractors are not only required to work at their convenient time but also multiple employers so long as they are honoring the agreement or contract ( Clarkson et al., 2010) . On the contrary, the working time and schedule of employees are monitored and controlled by employers. Besides, the court must determine the facts regarding the level of instruction that Scott was expected to receive from Blatt. Employees are often directed when, where, and how to accomplish their duties. As a result, many facts must be considered by the court.
Question 3
The court is most likely to rule that Scott is an independent contractor, especially based on his relationship with Blatt and the ways she carries out her duties. It is clear from the agency relationship that Scott is not directly supervised and controlled by Bratt ( Clarkson et al., 2010) . Her primary role is to sell insurance policy on behalf of Blatt, especially based on the contract. At the same time, Scott is working at her own time and schedule, and she is free to work for more than one company at a time, making her an independent contractor. It is possible that Blatt only terminated their contract after realizing that Scott was working with Perpetual Life Insurance Corporation, which is one of the Massachusetts Mutual Life Insurance’s main competitors in the market ( Clarkson et al., 2010) . Blatt terminated the contract in bad faith. Besides, it is most likely that Scott was an independent contractor because she operated from her own office. Hence, a New York state court is most likely to rule in favor of Scott because she was an independent contractor.
Question 4
The four main duties of the principal to the agent include compensation, reimbursement and indemnification, cooperation, and the provision of a safe working environment. Blatt mainly breached or violated his duty to cooperate with Scott in ensuring that she does as work as contained in the contract. Based on the duty of cooperation, Blatt was required to help Scott in accomplishing her role as a salesperson ( Clarkson et al., 2010) . However, Blatts did not cooperate with Scott and instead, he provided some hindrance to her work by withholding Scott’s contact information. Thus, Blatt's actions prevented Scott from performing her role and duties as required, making her lose sales. Also, Blatt breached his duty of indemnification ( Clarkson et al., 2010) . Blatt was required to compensate Scott for the loss of sales after he withheld his contact. Like any other principal, Blatt has to cooperate and compensate Scott for any service rendered.
Debate Question
Currently, there is a contentious debate about work for hire, primarily based on copyright laws in countries like the USA. In the USA, copyright law clearly states that any work created for hire is owned by the employer and not employees ( Saka, 2013) . Therefore, employees do not have a right over some of the works they have created based on the existing laws. Nonetheless, the law does not apply to independent contractors who are legally not considered as employees. Thus, independent contractors own all the work they have created because they are not considered work for hire, particularly according to the US copyright laws. Any work created by an independent contractor should not be considered a work for hire because the employer or principal has limited work control on how the job is accomplished ( Saka, 2013) . Unlike employees, independent contractors solely depend on their expertise and resources to create their work without depending much on the employer ( Deknatel & Hoff-Downing, 2015) . As a result, it would be unfair if the law considered the work created by independent contractors as the work for hire. Such laws should only apply to employees who largely depend on their employers to do their work.
References
Clarkson, K. W., Jentz, G. A., Cross, F. B., & Miller, R. L. (2010). Business Law: Text and Cases - Legal, Ethical, Global, and Corporate Environment (14 th ed.). Cengage Learning.
Deknatel, A., & Hoff-Downing, L. (2015). ABC on the books and in the courts: An analysis of recent independent contractor and misclassification statutes. Journal of Law & Social Change , 18 (3) , 53-72.
Kwak, J. P. (2012). Employees versus Independent Contractors: Why States Should Not Enact Statutes That Target the Construction Industry. Journal of Legislation, 39 (2) , 295-316.
Saka, R. P. (2013). Confidential Ideas and Independent Contractors: Trade Secret Ownership in the Age of the Hired Gun. Hastings Business Law Journal , 10 (1) , 245-295.
Tumbat, G., & Grayson, K. (2016). Authority Relinquishment in Agency Relationships. Journal of Marketing , 80 (3), 42-59.
