• Chapter 38: Relationships Between Principal and Agent
• Chapter 39: Liability of Principal and Agent; Termination of Agency
John Sams experienced a heart attack in the emergency room of Springs Memorial Hospital after being given a dose of penicillin for a sore throat. Sams sued the attending physician as well as the hospital. The hospital called itself a full-service hospital with emergency room facilities. Springs Memorial did not consider the doctors to be its agents. For tax and accounting purposes the doctors were not treated as employees of the hospital.
1.) Based on this information, discuss whether the doctors who treated patients in the emergency room were agents of the hospital.
2.) Research and define the term "agency by estoppel". What does it mean? Do you think that, in this case, an agency by estoppel should be found? In your opinion, would such a finding be a fair solution? Why or why not?
3.) Why must the principal in some way be responsible for creating the appearance of an agency before agency by estoppel will be found? What ethical considerations underlie this requirement?