Publicks v Sam’s Poultry Farm
Sam is an entrepreneur who owns and operates a large poultry farm in the state of Atlantis. The poultry farm has expanded rapidly over the last several years and now produces more than five million eggs a year that are sold and distributed to grocery stores in the southeast. Due to the rapid growth of Sam’s business, he decided to hire a sales manager to take over some of his responsibilities. Sam advertised the position and conducted several interviews before hiring Ellie.
Ellie is a salaried employee who reports to Sam but generally works without direct supervision. Ellie’s responsibilities vary, but her most important job is to take egg orders from grocery stores and ensure they are delivered on time. Sam, who has performed this task for years, introduced Ellie to all the buyers she would be working with and informs them that Ellie will take their egg orders from now on. Most sales managers for large farms take orders directly from grocery stores without needing further approval. Sam likes to be in control, and without informing any of the buyers, he told Ellie that at least for the next six months, she would need to consult with him before she would be permitted to accept any orders, even from existing buyers.
After five weeks in her position, Ellie received a call from Publicks, one of their regular buyers, who wanted to place an order. As part of their discussions, Publicks specified the number of eggs and when they needed to be delivered. Without consulting Sam, Ellie agreed to accept their order, assuring Publicks that the order could be filled and delivered by the requested date. Publicks also specified that the order was for USDA Grade A eggs, but because Ellie didn’t speak with Sam, she was unaware that Sam’s Poultry Farm currently had only USDA Grade B eggs available.
Ellie submitted the Publicks’ order to Sam’s Poultry Farm to be filled; however, Sam’s Poultry Farm did not have enough Grade A eggs to fill it. As a result of the failure to fill the order, Publicks is now suing Sam’s Poultry Farm for breach of contract based on the order it placed with Ellie. The lawsuit alleges that Sam’s Poultry Farm is liable because Ellie was an agent of Sam and that she had the authority to enter into the contract on his behalf. Sam’s Poultry Farm argues that Ellie lacked authority to enter into this contract on behalf of the farm and that Ellie also breached the duties she owed Sam as an employee/agent.
Use the FIRAC model to analyze Publicks’ claim against Sam’s Poultry Farm, whether Ellie breached any duties she owed Sam, and the consequences of any such breach.
In discussing whether Ellie had the authority to enter into a contract with Publicks on behalf of Sam’s Poultry Farm, you will need to identify and explain in your rule statement each type of authority an agent may have. In your application section, apply the facts to each of these legal rules to determine what type of authority Ellie had.
In addition, you need to analyze whether Ellie breached any duties owed Sam, and if so, which. This means that you’ll need to identify and explain all the duties an agent owes a principal in your rule section. In the application section, apply the facts to each of these duties to determine what duties Ellie owed Sam and which she may have breached.
If Ellie breached any duties owed Sam, what are the consequences of that breach?
Extra-Credit Option: Kroker v Sam’s Poultry Farm
Assume that a few days after accepting the Publicks order, Ellie received a call from Kroker, another regular buyer, who wanted to place an egg order. The representative for Kroker had recently conducted separate business with Sam, during which Sam had mentioned that he didn’t let Ellie take orders without his approval. Despite this knowledge, Kroker also placed a large order for USDA Grade A eggs with Ellie, which she accepted.
Ellie submitted the Kroker order to Sam’s Poultry Farm to be filled and again the farm did not have enough USDA Grade A eggs to fill the order. As a result of the failure to fill this order, Kroker is also suing Sam for breach of contract based on the order its representative placed with Ellie. The Kroker lawsuit also alleges that Sam is liable because Ellie was an agent of Sam and that she had the authority to enter into the contracts on his behalf. Again, Sam claims that Ellie lacked the authority to enter into an egg contract with Kroker on behalf of Sam’s Poultry Farm and that she also breached the duties she owed Sam as an employee/agent.
You don’t need to conduct a full second FIRAC analysis. In 2-3 paragraphs, however, you should note any changes to the facts, the legal issue to be resolved, and relevant legal rules before applying those rules to the facts. When you do, does this change your conclusion? If so, how? This EC option can add up to 10 points to your FIRAC score!
