Jack Kihn incorporated and put $20,000 into the corporation by way of a shareholder's loan and took back a Security Agreement on the corporation's equipment. The corporation created decorative boxes. An employee of the company delivered some boxes to a customer who complained about the colour used. The employee became so angry that he shoved the customer, who fell into a glass display case, causing $30,000 damage to the customer and the case. On these facts, which of the following is False?

Question

Quizplus · Accepted Answer

Vicarious liability means that an employer is liable for the actions of their employees while they are acting within the scope of their employment. However, in this case, there is no indication that the employee's actions were within the scope of his employment, as he became angry and committed a battery. Therefore, Kihn would not be vicariously liable for the damages caused by the employee. Choice D is also false, as the security agreement on the corporation's equipment would only give Kihn a security interest in that equipment, not make him a creditor of the corporation.

Jack Kihn Incorporated and Put $20,000 into the Corporation by Way