Exam 28: Relationship of Principal and Agent

Victor negligently led Gus to believe that Brenda had the authority to act on Victor's behalf. If Brenda had no authority but Gus reasonably and in good faith relied on Brenda's apparent authority:

a. What is a fiduciary? b. What are the implications of an agent's fiduciary obligation? What is an agent prohibited from doing as a result of this obligation? Explain.

By the operation of law, the occurrence of certain events will automatically terminate an agency relationship.

The appointment of an agent by a minor or an incompetent not under guardianship and any resulting contracts are voidable.

A plumber hired to redo the plumbing in a building is an independent contractor and an agent of the owner of the building.

Mark hires Joe's real estate agency to sell his property, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then Mark wins the three million-dollar lottery! Joe reads this in the newspaper and that afternoon makes a contract with Sharon to sell the property. Is the contract valid?

All independent contractors are agents, but not all agents are independent contractors.

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

Anna employs Mark to purchase for her a suitable site for a roller rink. Mark owns a huge site himself and sells it to Anna at fair market value without disclosing to her that he is the owner of the land. Mark has not breached his fiduciary duty to his principal.

An agent will not be authorized to act for a principal unless he receives some consideration for the task.

When the agency terminates, the agent's duty of confidentiality continues.

An agent is not required to keep which of the following information confidential?

a. Explain how an agency relationship comes to an end. b. Is an agency relationship ever irrevocable? Explain.

Authority conferred upon an agent for a specified time does not continue after the specified time.

Which of the following agents would not have authority to contract with third parties on behalf of the principal?

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

A gratuitous agent is not subject to the same duty of loyalty that is imposed upon a paid agent.

Harold, a painter, contracts to paint a portrait of Irene. However, he has one of his students do the actual work. This is a proper delegation of authority to an agent.

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

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.