Idaho Law Blog
Misrepresentation is just another word for fraud. Misrepresentation, either intentional or through negligence simply means there was a failure to communicate. This section will first define the types of misrepresentation that exist in Idaho and will then discuss the basic elements of agency law, which is required for liability to rest on the employer.
There are two basic kinds of misrepresentation: intentional and negligent. Intentional misrepresentation is where a person essentially, knowingly tells a lie. Negligent misrepresentation occurs when a person either simply doesn’t bother to learn first whether the things they are saying are true or they believe something to be true that isn’t and they then represent these things to others. They aren’t intentionally deceiving anyone but what they are saying isn’t true.
According to the Idaho Supreme Court in the case Aspiazu v. Mortimer, 139 Idaho 548, 550 (Idaho 2003), the elements of actionable fraud or misrepresentation are that there must be evidence of: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on the truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Aspiazu, citing, Faw v. Greenwood, 101 Idaho 387, 389, 613 P.2d 1338, 1340 (1980).
However, even when an employee’s behavior involves misrepresentation this doesn’t mean that the employer will automatically be liable for it. The most important part of tying an employee’s misrepresentation(s) to the employer is the doctrine of agency.
For agency laws to apply there must be a principal, which would be the employer, and an agent, which would be the employee. The laws associated with agency are well described in Caballero et al., v. Wikse, 140 Idaho 329 (2004). In speaking of general agency principles in Caballero, the Idaho Supreme Court stated,
an agent may bind a principal if the agent has actual authority. Actual authority is that authority a principal expressly grants to an agent or impliedly confers on an agent because it is usual, necessary, and proper to achieve the object of the express authority granted to the agent. Bailey v. Ness, 109 Idaho 495, 497, 708 P.2d 900, 902 (1985) (citing, Clark v. Gneiting, 95 Idaho 10, 12, 501 P.2d 278, 280 (1972)). Even in the absence of actual authority, an agent generally may bind a principal if the agent is cloaked with apparent authority. Apparent authority arises when ‘the principal voluntarily places an agent in such a position that a person of ordinary prudence, conversant with the business usages and the nature of a particular business, is justified in believing that the agent is acting pursuant to existing authority.’” Caballero v. Wikse, 140 Idaho 329, 332 (2004) (quoting, Clark, 95 Idaho at 12, 501 P.2d at 280).
So, tying this all together, an employer can be liable to another person for the misrepresentations of its employee, if there is a misrepresentation and if the laws of agency apply.
If you have questions about employer liability for its employees, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Employment Law attorneys in Idaho. You can also email Lane Erickson directly at lve@racinelaw.net. We will answer your Idaho Employment Law questions and will help you solve your Idaho Employment Law problems.
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