Exam 38: Duties and Liabilities of Principals and Agents

A CEO could be referred to as a/an __________ agent.

An agent's power to bind a principal in contract is derived from the agent's authority, which may arise from __________ authority.

Liability for agents who are classified as employees is derived from the doctrine of __________.

Most C-level executives are referred to as __________ agents.

If the employee's negligent __________ results in harm only to emotional state, reputation, or a purely economic loss, respondeat superior does apply.

When a third party is completely unaware of an agency relationship and believes that the agent is acting on her own behalf when contracting, this is called a/an __________ agency.

In a partially disclosed agency relationship, both the __________ and the agent may be liable for the obligations under the contract.

In a fully disclosed agency relationship, only the __________ is contractually obligated to the third party for authorized acts.

The doctrine of respondeat superior is limited by a requirement that in order for a principal (employer) to be liable for the employee's tort, the act must have occurred within the employee's employment.

As agents, they may under certain circumstances create liability to the principal in __________ and tort.

A principal may face __________ liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.

In Riley v. Standard Oil Co. of New York, 231 N.Y. 301 (N.Y. 1921), the high court:

Principals often create agency relationships to give __________ the power to enter into contracts with third parties that are legally binding on the principal.

In an undisclosed agency relationship, the __________ is fully liable to perform the contract.

When the third party entering into the contract is aware of the principal's identity and knows that the agent is acting on behalf of the principal in the transaction, then the agency relationship is a/an __________ agency.

One of the reasons agency is such a useful legal concept is because it allows businesses as __________ to grow and transfer authority to agents within the organization's chain of command.

If the third party knows that the agent is representing a principal but does not know the actual identity of the principal, the agency relationship is a/an __________ agency.

Agents with authority over other agents are referred to as superior agents.

Agents under all circumstances create liability to the principal in contract and tort.

A principal may face joint-and-several liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.