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I am wondering if an employee of a company can represent themselves on the telephones as long as another company legally allows that employee to do so.

For example, Company A – a small delivery company – writes a contract which requests the services of Company B – a sales company – to do sales and dispatching for the delivery company.

Now Bob, who gets paid by and is employed by Company B, would need to call the delivery drivers or new potential clients and say "Hi this is Bob from Company A...". Under normal circumstances, this is fraud, but since there is a contract in place asking for the sales company to provide a service, if it would allow their employees to provide a service, in theory, there would be an alternate solution.

Can this representation on the telephones, and with clients or any other entity lead to legal problems as long as there are contracts in place allowing such an action?

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    Why not "Hi this is Bob on behalf of Company A...". – gnasher729 Sep 14 '16 at 7:53
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    Check the definition of fraud and then clarify how Bob saying he is "from Company A" would constitute that crime or tort. – feetwet Sep 14 '16 at 12:58
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    This happens most often in franchise agreements. All Subways are actually just a local company using the Subway brand and products with permission of Doctors Associates Inc. – user3851 Sep 14 '16 at 15:03
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If Bob is employed by B and B is contracted by A, it doesn't mean that there is a valid agency agreement between Bob and A, not even an implied agency agreement.

If Bob nevertheless decides to continue to claim that he is calling on behalf of A (only to the point of executing the contractual obligations of B which B has delegated to him), as long as he doesn't induce the clients to act in a way that would result in a (financial) injury/damage, his false claim wouldn't be considered as fraud. However, it would be viewed as misrepresentation. If the clients end up with monetary damages then it would be a fraudulent misrepresentation.

The only solution would be to create an addendum to the contract between A and B which can be easily done in 5 minutes to specify what Bob can and cannot do. When unsure, always steer on the safe side and do it in writing.

I'm not a lawyer though, I just relied on a basic Google search.

  • From the legal dictionary at thefreedictionary.com: agent:n. a person who is authorized to act for another (the agent's principal) through employment, by contract or apparent authority. The importance is that the agent can bind the principal by contract or create liability if he/she causes injury while in the scope of the agency. Bob (via B) has both a contract (to "do sales and dispatching" which entails binding of A to perform) and apparent authority (via the claim that he is "from A"). How is Bob and B not an agent of A? – sharur Sep 21 '16 at 20:42
  • Or to put it another way, if no employee/agent of B can enter into a binding contract with A, how can B complete its agreement with A to "do sales" which in my understanding involves making a (binding) sales contract. For example, when I worked with a recruiting company to find a job, an employee ("Bob") of the recruiter company ("B") signed an employment contract with me, on behalf of the company I was recruited to work for ("A"). – sharur Sep 21 '16 at 20:49
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I am not a lawyer. I am not your lawyer. Etc.

An online definition of "from": Used to indicate a source, cause, agent, or instrument.

Bob is an employee of B, but is acting as an agent of A. An agent is legal "One who agrees and is authorized to act on behalf of another, a principal, to legally bind an individual in particular business transactions with third parties". If Bob makes a sale of services to Customer C, said sale is binding on B, not A, in the same way that if Bob were part of B's (nonexistent) in-house sales department, rather than an exterior company.

As Bob is an agent of A, on whose behalf he is calling, he can refer to himself as "from A" when acting in that capacity.

(All definitions from thefreedictionary.com, which has a legal dictionary section)

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    You have two phrases in this answer which contradict one another: "Bob is an employee of B" & "As Bob is an agent of B". Can you please review this answer and fix any issues. Thank you – hawkhorrow Sep 20 '16 at 20:14
  • Thank you @hawkhorrow. For clarity, in your example, A is the delivery company and B is the sales company. (C being the customer). – sharur Sep 20 '16 at 20:17

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