IMPLIED DUTY IN SERVICE CONTRACT OF CARE, SKILL, DILIGENCE AND WORKMANLIKE MANNER

You hire a contractor to fix your roof. Contractor subcontracts with Bubba to do the work. Bubba sets your house on fire. It is a complete loss -- an $800,000 loss. Someone must pay, right.

Bubba obviously is negligent, but Bubba has no insurance. Contractor says that he is not liable for Bubba's negligence because Bubba is a subcontractor. And, Contractor is right. Under Tennessee law, the negligence of a subcontractor is not imputed to the principal. Of course, the parties to the contract can change that responsibility.

But wait, you say. My contract was with Contractor -- I never agreed to allow Bubba to do the work. Too bad, Contractor says. Our contract does not contain any provision that prohibits subcontracting. Therefore, Contractor can, under Tennessee law, subcontract the work and escape liability.

One last hope. According to the Tennessee Supreme Court, every contract for the performance of services contains an implied duty (not warranty) to perform the work in a "careful, skillful, diligent, and workmanlike manner." A contractor cannot escape this contractual duty by delegating the work to a third party. Of course, the parties were free to include in their contract a waiver of this "non-delegable" duty, but they did not.

This case is not the first case to recognize an implied duty in contracts -- that occurred in 1987. But, it is an important decision as it is another Tennessee Supreme Court case recognizing an implied duty.

Of course, the parties to the contract can always waive duties implied by law.

See Federal Insurance Company A/S/O Robert and Joanie Emerson v. Winters, et al.

SOCIAL MEDIA POLICY TOP 10

Don’t Prohibit Employees from using the company name, address on personal profiles.

Don’t Attempt to Regulate or Restrict an Employee’s use of Social Media from any location/device other than work locations or devices.

Do Exclude “Protected Activity” under the National Labor Relations Act.

Do Have Employees sign a separate acknowledgment of receipt of the Policy.

Do Prohibit Employees from conducting “Background” searches using Facebook/Twitter/Internet.

Do Prohibit Employees from disclosing “Confidential” information on Social Media sites.

Do define “Confidential” information.

Do Prohibit Employees from “pressuring” or otherwise harassing their co-workers to connect or “friend.”

Do respond to complaints regarding Facebook/Twitter posts quickly.

Do consider hiring 3rd parties to conduct background checks of prospective employees in sensitive positions and utilize the option to screen “protected” information (i.e., race, religion, national origin, color, veteran status, disability, genetic history).

AND, DO HAVE A POLICY ON SOCIAL MEDIA.

AG SAYS THAT COMMISSIONER OF DEPARTMENT OF REVENUE CAN IGNORE THE LAW WHEN POLITICALLY EXPEDIENT

According to the Tennessee Attorney General, the Commissioner of the Tennessee Department of Revenue has the authority to ignore the law when he or she finds it to be politically expedient. In this case, it is politically expedient for the State to have Amazon locate a warehouse facility in Tennessee; therefore, according to the Attorney General, the Commissioner can ignore the fact that Amazon should be collecting sales tax on all sales to Tennessee residents.

This opinion is one I intend to keep in my back pocket to use any time I am dealing with the State.

See Opinion No. 11-71