AFM231 Chapter 16: Chapter 16

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM231
• Professor: Robert Timberg

Document Summary

2 kinds of liability in tort: primary liability and vicarious liability. Court uses identification theory: theory specifying that a corp is liable when person committing wrong is corp"s directing mind. Corporation has liability when directly at fault when person was the corp"s directing mind and will . Usually highly placed officers have directing minds : mid-range employees is like a grey area and is case-based. When tort committed by agent or employee is not a directing mind of corp. Doesn"t distinguish between natural employer/principal (person) and artificial (corp) Corp bound by actions of agent only if actual or apparent authority. To avoid personal liability, person signing contract should include clause indicating person signing on behalf of corp and not personal capacity: impt in case of pre-incorporation contracts as well. Corporation committed a crime if person committed was directing mind of corp and he commited it in course of duties.