Reference no: EM133211508
Tony had a small business that provided delivery service using three vans. Tony worked in the company along with three employees. Tony contracted with several local bicycle shops to deliver parts from manufacturer warehouses --usually in one hour--so the shops could promise their customers "same day repairs." This worked out well and kept two of the vans busy every day. The vans were always back at Tony's business by 4 o'clock. Tony used the third van to deliver pastries to suburban offices. When the covid-19 virus required restaurants to close their dining rooms, Tony contracted with several restaurants to make take-out deliveries after 4 o'clock--and the vans were now busy from 8 am to 10 pm.
Although Tony was only in his 30s, his doctor warned him that he might die if he contracted the virus due to his severe asthma and that he needed to stay and "shelter" at home. With the van busy 15 hours a day and Tony unable to drive, he needed a 4th driver. One of the drivers recommended his pal Kevin who had a clean driving record. Tony hired Kevin as an "independent contractor" because Tony thought he might need a 4th driver for just a few months.
One night Kevin made his first of two take-out deliveries in the van. On the way back from the first stop, he made a side trip of about three miles to pick up some dinner for himself at his favorite fish & chip shop. On his way back from the fish & chip shop, he crashed the van into a new parked BMW while putting tarter sauce on the fish while driving. Kevin noticed a body shop still open, and its owner told him: "I'm wide open tomorrow--I can fix the van's dented fender for $1,000, but for $5,000, I can also paint the whole van, and it will look like new." Without calling Tony, Kevin responded: "Great. We'll go for the whole paint job. My boss is good at it. I'll drop the van off tomorrow."
Required: Assume no car insurance is available
Assume Tony has received the $5,000 body shop bill. Under agency law, is Tony liable for Kevin's deal with the body shop (does Tony have to pay the total $5,000, a smaller amount, or perhaps nothing)?