Exam 38: Duties and Liabilities of Principals and Agents

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

Agents who report to other agents are called worker agents.

In a partially undisclosed agency relationship, the law imposes liability on the agent in the event that the principal does not perform her contractual obligations.

Brian hired Craig to negotiate a deal with Rudy. Brian instructs Craig that while he is in Rudy's office, he should be able to steal the important file. If Craig has the opportunity to steal the file but fails to do so, what is a true statement concerning this incident and Craig?

Novation occurs when the principal affirms a previously unauthorized act.

Clyde has been hired to deliver a truckload of hogs to a cross-state slaughterhouse. On the way there he stops to visit his girlfriend Samantha, who lives five minutes off his prescribed route. He spends five minutes with her. During those five minutes he is considered to be on a/an __________.

Actual authority requires the principal to create the impression authority exists.

Liability for agents who are classified as independent contractors is derived from the doctrine of respondeat superior.

Many courts have adopted the __________ rule whereby employers are generally not liable for tortious acts committed by employees while on their way to and from work.

An __________ agent who enters into a contract with a third party binds the principal because the third party may legally enforce the contract against the principal.