Friday, November 16, 2012

Murphy v. Holiday Inns, Inc. case brief

Murphy v. Holiday Inns, Inc.

                                                              FACTS-P slipped and fell on a puddle of water that was dripping from an air conditioner unit at a hotel.
-P wanted to hold Defendant accountable for her injuries.
-A third party owned the hotel, but they agreed to a franchise agreement with Defendant that dictated the name and look of the building and fixtures.
-Agreement also required the third party to submit reports and pay Defendant a certain amount per room per day.

The court stated the contract did not establish a master-servant relationship. Many of the provisions of the contract were in place to protect D’s trademark. However, normal day-to-day operations, such as hiring, price structure and business expenditures were still controlled by the third party hotel owner.

                                                            ii.      If the facts establish an agency relationship, parties cannot disclaim it by formal consent.
1.      Express language of the contract is relevant, but not dispositive.

                                                          iii.      Control Test – In determining whether a contract establishes an agency relationship, the critical test is the nature and extent of the control agreed upon.

                                                          iv.      Franchise Contracts
1.      May constitute agency relationships.
2.      “If a franchise contract so ‘regulates the activities of the franchisee’ as to vest the franchisor with control within the definition of agency, the agency relationship arises even though the parties expressly deny it.”
3.      à Look for consent.  No agency relationship without consent.

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