Legal Memorandum: Company's Liability for Employees Acts

Issue: What cases in Minnesota address the issue of when a company may be held liable for the actions of its principal or owner?

Area of Law: Business Organizations & Contracts
Keywords: Company's liability; Principal or owner; Act of agent
Jurisdiction: Minnesota 
Cited Cases: 161 N.W.2d 40; 298 Minn. 465; 65 F.3d 1427; 493 N.W.2d 528; 251 Minn. 110; 354 N.W.2d 17; 281 Minn. 149; 86 N.W.2d 716; 215 N.W.2d 793
Cited Statutes: None
Date: 03/01/2012

Semrad v. Edina Realty, Inc., 493 N.W.2d 528 (Minn. 1992) (stating general rule that “a principal is liable for the act of an agent committed in the course and within the scope of the agency and not for a purpose personal to the agent,” but “a principal is not liable for the unauthorized intentional tort of its agent”; and holding that the corporation was not liable because it never authorized or approved agent’s actions)

State v. Christy Pontiac-GMC, 354 N.W.2d 17, 20 (Minn. 1984) (holding, in criminal context, that a corporation faces liability only if the individual employee’s action’s “reflect corporate policy so that it is fair to say that the activity was the activity of the corporation,” i.e., “if (1) the agent was acting within the course and scope of his or her employment … ; (2) the agent was acting, at least in part, in furtherance of the corporation’s business interests; and (3) the criminal acts were authorized, tolerated, or ratified by corporate management”)

Thomas Oil, Inc. v. Onsgaard, 298 Minn. 465, 469, 215 N.W.2d 793, 796 (1974) (observing that a corporation can only act through its agents, and that “the acts of negligent employees are actually and substantially the acts of the corporation”)

Kasner v. Gage, 281 Minn. 149, 161 N.W.2d 40 (1968) (stating rule, set forth in Restatement (Second) of Agency, that a principal cannot be […]

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