Exam 20: Relationship With Third Parties

Samuel writes to Emma authorizing her to sell his automobile for $3,000.Emma, although she has no authority to delegate this task, asks Renaldo to try to sell the car.If Renaldo makes a contract with Michelle for the sale of the car, Samuel is not obligated to sell to Michelle, and Samuel acquires no rights against Michelle.

Sam is a sales representative for the INC Corporation.Sam has a terrible driving record and has had his driver's license revoked, but nevertheless he continues to drive the company car for his job.One day he drives too fast for conditions, goes through a red light, and strikes a pedestrian.The accident happened despite the fact Sam's supervisor at INC had repeatedly reprimanded him and advised him to drive more cautiously.INC has:

The contract liability of the principal may depend upon whether the principal is disclosed, partially disclosed, or undisclosed.

Authority that is not found in the express or explicit words of the principal, but that is inferred from the words is known as:

An agent is not normally liable on a contract he makes with a third party on behalf of a(n) principal.

Under the Uniform Durable Power of Attorney Act, if a principal who has executed a written durable power of attorney becomes incapacitated, the actual authority of an agent survives.

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

Martinez makes a contract with Bowers on behalf of a disclosed principal.If Bowers breaches the contract, ordinarily Martinez has no right of action against Bowers.

An agent who makes a contract with a third person on behalf of a disclosed principal usually is not a party to the contract.

If an agent at his principal's direction fixes prices with the principal's competitors:

Even though an agent exceeds his express authority, the principal may still be bound.

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

Ratification:

If Carol, acting as agent for Steve, signs a contract, she alone will be personally bound by it:

John agreed to build a new house for Ted.Unknown to John, Ted was an agent for Russell Realty.John built the house as agreed.When Ted refused to pay, John became aware that Ted was an agent for Russell.John wants to sue on the contract.Under the Second Restatement, John:

There can be apparent authority where a third party knows the agent has no actual authority.

Apparent authority is actual authority.

Leonard is a traveling salesman for Bighorn, Inc.He calls on Ralphyl, one of his regular accounts, in order to solicit another order.While in the store, Leonard collects a past due account for Bighorn, but he doesn't get another order.It has been a bad day in which Leonard hasn't had any orders.He is so angry about this when he leaves the store that he drives negligently and hits a pedestrian with his car.In this case:

Which of the following is correct under the Second Restatement with regard to actual notice to a third party of the termination of an agent's authority to act on behalf of the principal?