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CPA Exam — REG (Regulation)Business LawMedium

A general contractor, Builder Inc., hires a subcontractor, Electric LLC, to handle all electrical work for a new commercial building project. During the project, an employee of Electric LLC negligently installs wiring, causing a fire that damages a portion of the building. The property owner sues Builder Inc. for the damages. Under which legal doctrine might Builder Inc. be held liable for the actions of Electric LLC's employee?

  1. ARespondeat superior
  2. BEstoppel
  3. CPromissory estoppel
  4. DContributory negligence
Show answer & explanation

Correct answer: A. Respondeat superior

Respondeat superior is a doctrine that holds an employer (or principal) responsible for the wrongful acts of an employee (or agent) committed within the scope of employment. While Electric LLC is a subcontractor, Builder Inc. could potentially be held liable if Electric LLC was considered an agent or if Builder Inc. retained significant control over the electrical work, making Electric LLC's employee an 'employee' for liability purposes.

Why the other options are wrong

  • B. Estoppel is a legal principle that prevents someone from asserting a right or fact that is contrary to their previous statements or actions, not directly about vicarious liability.
  • C. Promissory estoppel is a contract law doctrine that enforces a promise even without formal consideration if a party reasonably relied on it, distinct from tort liability.
  • D. Contributory negligence is a defense where the plaintiff's own negligence contributed to the injury, not a doctrine for holding one party liable for another's actions.

Respondeat Superior

A legal doctrine holding an employer (or principal) liable for the wrongful acts of an employee (or agent) committed within the scope of their employment or agency.

  • Means 'let the master answer'.
  • Applies to torts committed by an employee during the course of employment.
  • The employer is vicariously liable, even if not directly negligent.

Memory trick: Vicarious: One's Actions, Another's Blame.

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