BUSINESS LAW -Builders-R-Us Construction Company contracts with Classic

QUESTION

Builders-R-Us Construction Company contracts with Classic BeverageCorporation (CBC) to build CBC’s corporate headquarters. Builders-R-UsConstruction then contracts with Valley View Tools & Materials Inc. forconstruction supplies but refuses to pick up(or pay for) the order. Meanwhile, CBChires Stanley, a certified public accountant, to work in its cost-accounting divisionas an employee, with no authority to hire or supervise others. Stanley asks Jackson,an outside experienced accountant, to advise him on certain accounting proceduresbut fails to pay Jackson for the service. CBC also contracts with Chelsea, asalesperson, to solicit orders for its products in a designated territory. Chelseaobtains an order from Highbridge Novelties Inc.; she assures Highbridge NoveltiesInc. the order will be filled soon. But Chelsea does not follow through with thepaperwork and fails to submit the order to CBC. Highbridge Novelties suffers aloss. Valley View Tools, Jackson and Highbridge Novelties each claim CBC isliable under agency law. Discuss fully whether an agency relationship was createdby CBC with Builders-R-Us Construction Company, Jackson or Chelsea.

ANSWER:

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