Cengage Advantage Books: Business Law 13th Edition by Roger LeRoy Miller

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Spotlight on Agency-Independent Contractors.

Frank Frausto delivered newspapers under a renewable six-month contract called a "Delivery Agent Agreement." The agreement identified Frausto as an independent contractor. The company collected payment from customers and took complaints about delivery. Frausto was given the route for his paper delivery and was required to deliver the paper within a certain time period each day. Frausto delivered the papers using his own vehicle and had to provide proof of insurance to the company. The company provided health and disability insurance but did not withhold taxes from Frausto's weekly income. One morning, Frausto was delivering papers and collided with Santiago on his motorcycle. Santiago filed a negligence action against Frausto and the newspaper company. The newspaper company argued that it should not be liable because Frausto was an independent contractor. What was the result? Why? [Santiago v. Phoenix Newspapers, Inc., 794 P.2d 138 (Ariz. 1990)]