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A local hotel operated under a franchise agreement with a major hotel chain. Several customers charged...

A local hotel operated under a franchise agreement with a major hotel chain. Several customers charged the banquet director of the local hotel with misconduct and harassment. They sued the hotel chain (the franchisor) for acts committed by the local hotel (the franchisee), claiming that the franchisee was the agent of the franchisor. Is an agency created under these circumstances? Why?

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Answer #1

No.

The reason is that under Agency law, the agent will act on behalf of the principal. Any transactions will be takes care of by the Agent. So any gross misconduct or the liability cost by the Agent will not be transferred to the Principal of the hotel or rather the Principal will not bare the liability in the court f law since the burden rests withe the Agent for poor work, under performance or the Gross misconduct in the entire hotel. It is the duty of the Agent to take care of the Principals affair without any negligence as assigned and as agreed under the law of Agency.

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