Question 1

In the Parlato v. Equitable Life Assurance Society of the United States case, the court held:

Accepted Answer

A)  the duty is on the party with whom an agent deals to discover the principal's identity. 
B)  the agent's disclosure of a trade name and the plaintiff's awareness of that name are sufficient to protect an agent from personal liability on a contract. 
C)  a principal is not responsible for torts its former agent commits after termination of the agency relationship against a third party unknown to the principal. 
D)  apparent authority of an agent is always terminated at the same time as the termination of the agent's actual authority. 
A)  the duty is on the party with whom an agent deals to discover the principal's identity. 
B)  the agent's disclosure of a trade name and the plaintiff's awareness of that name are sufficient to protect an agent from personal liability on a contract. 
C)  a principal is not responsible for torts its former agent commits after termination of the agency relationship against a third party unknown to the principal. 
D)  apparent authority of an agent is always terminated at the same time as the termination of the agent's actual authority.

Question 2

Apparent authority is not actual authority.

Accepted Answer

A) True 
 B)False

Question 3

An agent is not personally liable for the torts he commits while in the scope of his employment.

Accepted Answer

A) True 
 B)False

Question 4

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Saxton, a prospective purchaser. The next day, Richard sends a letter to Sarah revoking her authority, but he fails to notify Saxton . Sarah:

Accepted Answer

A)  has actual authority to sell the car to Saxton . 
B)  has implied authority to sell the car to Saxton . 
C)  has apparent authority with respect to Saxton to sell the car. 
D)  is empowered under the doctrine of respondeat superior to negotiate the contract. 
A)  has actual authority to sell the car to Saxton . 
B)  has implied authority to sell the car to Saxton . 
C)  has apparent authority with respect to Saxton to sell the car. 
D)  is empowered under the doctrine of respondeat superior to negotiate the contract.

Question 5

Constructive notice may occur by publication in a newspaper of general circulation.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true regarding an agent who is acting for an undisclosed principal?

Accepted Answer

A)  The agent will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud. 
A)  The agent will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud.

Question 7

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.

Accepted Answer

A) True 
 B)False

Question 8

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Accepted Answer

A) True 
 B)False

Question 9

Usually in cases where there is a known principal, the agent has liability for, and rights under, contracts made on behalf of a principal.

Accepted Answer

A) True 
 B)False

Question 10

The power of an agent is her ability to change the legal status of her principal.

Accepted Answer

A) True 
 B)False

Question 11

To effect a ratification, the principal must manifest an intent to do so with knowledge of all material facts concerning the transaction.

Accepted Answer

A) True 
 B)False

Question 12

Sam is a sales representative for the Incman 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 that Sam's supervisor at Incman had repeatedly reprimanded him and advised him to drive more cautiously. Incman:

Accepted Answer

A)  has no liability, because they did not authorize Sam to drive carelessly. 
B)  is partial  liable , because Sam's actions were criminal. 
C)  is liable even though it did not authorize Sam to drive carelessly, because it employed an improper person as its agent. 
D)  has no liability, because it has adequately supervised Sam as its agent. 
A)  has no liability, because they did not authorize Sam to drive carelessly. 
B)  is partial  liable , because Sam's actions were criminal. 
C)  is liable even though it did not authorize Sam to drive carelessly, because it employed an improper person as its agent. 
D)  has no liability, because it has adequately supervised Sam as its agent.

Question 13

Name the two basic types of authority with regard to agents and explain the difference between them.

Accepted Answer

The two basic types of authority are act

Question 14

a. What is an undisclosed principal? 
b. What is an unidentified (partially disclosed) principal? 
c. What liability does an agent have to a third party when the principal is either undisclosed or unidentified (partially disclosed) ? 
d. Dale is asked to be an agent for Phil, but Phil does not wish third parties to know that Dale represents him. In light of your answer to part (c), why would Dale want to be an agent for Phil? Why would Phil wish that third parties not know his identity? Explain.

Accepted Answer

a. An undisclosed principal is not known

Question 15

Under the Third Restatement, an agent representing an undisclosed principal is discharged from liability if the third party:

Accepted Answer

A)  gets a satisfied judgment against the principal. 
B)  becomes aware of the principal. 
C)  gets a judgment against the agent. 
D)  He is never discharged from liability. 
A)  gets a satisfied judgment against the principal. 
B)  becomes aware of the principal. 
C)  gets a judgment against the agent. 
D)  He is never discharged from liability.

Question 16

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is correct with regard to the doctrine of respondeat superior ?

Accepted Answer

A)  It is a form of liability without fault. 
B)  It ordinarily holds an employer liable for the acts of both employees and independent contractors. 
C)  The liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
D)  It is a form of liability without fault and t he liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
A)  It is a form of liability without fault. 
B)  It ordinarily holds an employer liable for the acts of both employees and independent contractors. 
C)  The liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
D)  It is a form of liability without fault and t he liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment.

Question 18

Sam is George's agent. George decides to fire Sam. Mel is an old customer of George's and he has dealt with Sam for over 20 years. Ellie is a prospective customer that Sam has spoken with on numerous occasions in his capacity as George's agent, and George was aware of the preliminary negotiations. Mel orders goods from Sam after Sam has been fired but Mel has no knowledge of the firing. Later, Sam takes an order from Ellie, who does not know of the firing. Using the rules of the Second Restatement, which of the following statements would apply to this scenario?

Accepted Answer

A)  George will be liable for the contract with Mel. 
B)  George will not be liable on the contract with Mel. 
C)  George will not be liable on the contract with Ellie. 
D)  George will be liable for the contract with Mel but not liable on the contract with Ellie 
A)  George will be liable for the contract with Mel. 
B)  George will not be liable on the contract with Mel. 
C)  George will not be liable on the contract with Ellie. 
D)  George will be liable for the contract with Mel but not liable on the contract with Ellie

Question 19

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

Accepted Answer

A)  undisclosed principal. 
B)  disclosed principal. 
C)  unidentified principal. 
D)  any principal. 
A)  undisclosed principal. 
B)  disclosed principal. 
C)  unidentified principal. 
D)  any principal.

Question 20

Under the rule of the Third Restatement, if a principal becomes incapacitated, the agency relationship terminates and all authority ceases.

Accepted Answer

A) True 
 B)False

Exam 29: Relationship With Third Parties

In the Parlato v. Equitable Life Assurance Society of the United States case, the court held:

Apparent authority is not actual authority.

An agent is not personally liable for the torts he commits while in the scope of his employment.

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Saxton, a prospective purchaser. The next day, Richard sends a letter to Sarah revoking her authority, but he fails to notify Saxton . Sarah:

Constructive notice may occur by publication in a newspaper of general circulation.

Which of the following is true regarding an agent who is acting for an undisclosed principal?

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Usually in cases where there is a known principal, the agent has liability for, and rights under, contracts made on behalf of a principal.

The power of an agent is her ability to change the legal status of her principal.

To effect a ratification, the principal must manifest an intent to do so with knowledge of all material facts concerning the transaction.

Name the two basic types of authority with regard to agents and explain the difference between them.

Under the Third Restatement, an agent representing an undisclosed principal is discharged from liability if the third party:

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

Which of the following is correct with regard to the doctrine of respondeat superior ?

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

Under the rule of the Third Restatement, if a principal becomes incapacitated, the agency relationship terminates and all authority ceases.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance Breach and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property Property Insurance Bailments and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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