Exam 19: Relationship of Principal and Agent

An agent hired to buy gems for his principal can buy a diamond to give to his wife only if he asks his principal first; otherwise, he has breached his fiduciary duty.

The operation of agency involves at least three persons.

An agent may be liable to his principal if he improperly delegates his authority.

Which of the following may terminate an agency agreement by operation of law?

Edward writes to Judy, who is in the business of purchasing goods for others, telling her to purchase certain goods and ship them to him.Before answering Edward's letter, Judy does as directed and charges the goods to Edward.Judy was not authorized to do this because an agency relationship did not yet exist between Edward and Judy.

Robert advances money to John so that John can purchase inventory for his business.In return and for security on the loan, John makes Robert his agent.If John:

Amber, who is an agent for Peter, breaches her fiduciary duty to Peter.Amber:

A minor can act as an agent for an adult.

Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a videotape recorder from VideoWorld. The transaction between Joe and VideoWorld is:

Carl loans Dan $1,500 for Dan's honeymoon.Dan gives Carl his ruby ring as security for the loan and after a year, tells Carl he may as well sell it to recoup the $1,500.When Dan's wife hears of this, she persuades Dan to call Carl and get back the ring.Can Carl sell it anyway?

Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained.Edward sells the goods in a market that is glutted and obtains a low price, even though he could have obtained a higher price in a nearby market by using more care in obtaining the available market information.Edward is liable to Diane for breach of the duty of diligence.

Which of the following is not a breach of an agent's duty of obedience?

Carolyn, a cashier at Tops Supermarkets, may cash checks for up to $20 over a purchase amount.A friend needs money for a dress, so Carolyn cashes a check for $50 with no purchase.If the check bounces, Carolyn is:

All of the following except which one is a duty of an agent?

A principal has no duty to compensate his or her agent if:

Which of the following will terminate an agency coupled with an interest?

An agent whose compensation depends on his accomplishing a specific result is entitled to the agreed compensation only if the result is achieved within a reasonable time if no time is stated.

Trudy would breach the duty to inform if she failed to tell her principal:

All employees are agents, but not all agents are employees.

An agency: