Problem
Scenario
Sierra is the owner of a small company that sells handmade crafts online. She decides to hire Toby as her sales representative to help expand the business. Sierra and Toby agree that Toby will receive a commission of 5% on all sales he makes. Toby is given a list of customers and is told to contact them and try to make sales. Toby makes a sale to one of Sierra's customers but fails to inform Sierra about the sale. When Sierra finds out, she is angry and tells Toby that he violated their agreement.
Task
A. What is agency law?
B. Who is the principal in this scenario? Who is the agent?
C. What type of agency relationship exists between Sierra and Toby?
D. Did Toby have the authority to make the sale to Sierra's customer?
E. What are the consequences of Toby's failure to inform Sierra about the sale?
F. What are Sierra's legal options in this situation? When considering legal options, think about what you learned in earlier modules (e.g., dispute resolution, contracts law, etc.)