Exam 27: Operation and Termination of an Agency

Jack, acting as an agent for Mike, purchases two tonnes of wheat on credit from Bryan. As per the agency contract, Jack is entitled to make all purchases under Mike's name. However, Mike refuses to make payment. Which of the following is legally permissible in this scenario?

Which of the following is true of the relationship between an agent and a principal?

The principal may terminate the agency by taking actions that are inconsistent with the continuation of the agency.

When an agency agreement does not state the amount of compensation, the agent may obtain reasonable compensation for the services provided.

Which of the following is a duty a principal has toward his agent?

Agents have a duty to keep principals informed of all facts pertinent to the agency.

Which of the following best describes durable power of attorney?

The termination of corporation's operation except activities needed for liquidation is known as _____.

An agent does not incur personal liability for fraud or any other wrongdoing caused by disobedience.

An agent is not allowed to terminate an agency without the permission of the principal.

Agents who contract in their own names become liable to the same extent as though they were the principals.

Explain why a notice of termination must be given to third parties.

The relationship of principal and agent is fiduciary in nature.

Which of the following is true of an agent's liability toward a third party?

A contractual payment made by an agent for a principal is an expense for the agent.

Jones acted as Blake's agent for 12 years before this contract of agency was dissolved by Blake. However, Blake failed to convey this fact to those vendors whom Jones has transacted with in the past. Which of the following is likely to occur if Jones negotiates future contracts with these vendors on Blake's behalf?

An agent does not incur liability for any losses caused by disobeying a principal's instructions.

Which of the following best describes an agency coupled with an interest?

A principal ordinarily does not have liability to third parties for contracts made within the actual or the apparent scope of an agent's authority.

Destruction of the subject matter to be sold by the agent does not terminate the agency.