Exam 19: Agency and Other Methods of Carrying on Business

Mori is an employee of Garvie Corp, a film production business.Mori's job is to negotiate with screenplay writers for the rights to use the screenplay writers' work.He was given authority to sign a contract on behalf of Garvie with Joseph, a screenplay writer, for a specific screenplay.In October, a contract was concluded by Mori on behalf of Garvie with Joseph for the rights to that screenplay.In November, Mori entered into another contract with Joseph for a different screenplay.Neither Mori nor Garvie have ever said anything to Joseph about Mori's authority to act for Garvie.The contract is binding on Garvie.

Sureeya sells jewelry at her store premises.Sureeya agreed to sell Janet's ring as her agent.Janet agreed to pay Sureeya a commission of $100 regardless of the sale price.Under their agreement, Sureeya did not have authority to sell the ring without Janet's approval.After Sureeya put the ring up for sale, Talia offered Sureeya $7500 for it.This was far above the regular fair market price of $5000 because the ring would complete a set that Talia had.Sureeya sold the ring to Talia.Which of the following best describes Sureeya's legal position?

Which of the following statements regarding a principal's liability for the torts of its agents is TRUE?

Laurna hired Ned to act as her stockbroker.Ned purchased certain stocks on Laurna's behalf and at her specific direction.Ned advised her not to buy them, saying that they were too risky, but she insisted.Because those stocks subsequently dropped in value, Laurna has sued Ned for compensation.Which of the following is TRUE?

Stone entered into an agreement with Star Alarms Inc, a corporation that sells alarm systems for personal residences, under which he would act as an agent for Star to find customers for Star's alarm systems.In the course of his work for Star, Stone learns quite a bit about alarm systems.A friend offers to sell him an alarm system business for commercial buildings, a segment of the market that Star has never pursued.Stone decides that he would like to buy the business.Which of the following is TRUE? Stone's fiduciary duty requires that he

Grosjean is employed as a truck driver by Newcastle Co.One day while he was making deliveries for Newcastle in its delivery van, he notices that the van was low on gas.He used his own money to buy gas so that he could complete his deliveries that day.In the absence of a provision in Grosjean's contract with Newcastle to the contrary, Newcastle is obliged to reimburse Grosjean for the cost of the gas because it was an expense reasonably incurred by him in carrying out his duties for Newcastle.

A commercial representation agreement

Samantha was the vice-president of purchasing for Amsterdam Books Inc, a chain of retail bookstores.She hired Anthea as a buyer of children's books for the chain.Storm Coast Books Ltd had never dealt with Amsterdam before.Anthea turned up at their offices, told them she was a buyer for Amsterdam, and gave out the business cards that Amsterdam had printed for her.Anthea entered into a contract with Storm Coast Books Ltd to buy 5000 copies of a new adventure book.Unfortunately, Samantha had no authority to hire Anthea.A section in the corporation's by-laws provides that only the president of the corporation can hire buyers.The contract is nevertheless enforceable by Storm Coast Books.

Rula hired Mike to act as her stockbroker.In that capacity, Mike was authorized to buy and sell stocks on behalf of Rula as her agent.Rula paid very little attention to the details of the transactions that Mike entered into on her behalf.She adopted a very different attitude, however, after she received an anonymous tip that Mike was intentionally inflating the commissions that he received for buying and selling stocks for Rula by making an unreasonably large number of trades for her account.Which of the following statements is TRUE?

Marta agrees to buy two tons of tomatoes from Argus Farm Products Inc, hoping that she can find a principal to take responsibility for the contract.In her discussions with Argus, she does not indicate that she intends only to contract as an agent for a principal that she hopes to find.If Fresh Vegetables Ltd ratifies the contract, it can only be enforced by Argus against Fresh Vegetables Ltd.

Mathilde entered into an agreement with Pascal saying that she was acting on behalf of Citron Used Cars to purchase cars.In fact, Mathilde had no actual or apparent authority to do so.Moreover, Citron now refuses to ratify the agreement.In this situation, Pascal can hold

Orestes was employed as the manager of Coral Gables Horse Farm, a business carried on by Coral Gables Inc.Orestes was responsible for the day-to-day operations of the farm, including the care and maintenance of the horses and the management of the staff.Calum owned all the shares in the corporation and was the sole director and officer of Coral Gables Inc.He was the only one who had authority to buy new horses.In January, Calum asked Orestes to go to the local horse dealer and buy two stallions.Orestes bought the horses.Orestes thought that he had been given a general authority to buy horses for the farm, but that was not Calum's intention.In February, Orestes went to the horse dealer without Calum's permission and purported to buy from the horse dealer two more stallions on behalf of the corporation.When the horse dealer delivered the horses and asked for payment, Calum refused.Can the horse dealer enforce the contract? If not, does the horse dealer have any other remedy?

Selma Corp and Kor Industries Inc are steel producers that have entered into a joint venture to recycle their waste.They have set up a corporation, Re-Steel Co, to carry on the joint venture business.Selma and Kor are shareholders and each has a nominee on the board of directors.The employees of Selma and Kor must be agents of the joint venture.

For several years, Jelena worked as an agent for Vladimir, a hockey player for the St Catharines Blackhawks.Jelena regularly negotiated Vladimir's contracts and agreed to them on his behalf.In August 2009, Vladimir terminated the agency.He had decided that he could negotiate his own contracts.He neglected to tell Jelena or the Blackhawks.In September 2009, Jelena signed a contract on his behalf with the Blackhawks for the 2009-2010 season.Which of the following is TRUE?

Romeo, an engineer, owns RR Consulting.Carmen, his wife, is not formally part of the business.In fact, Romeo has repeatedly insisted that she must stay out of the office, but she often ignores his wishes while he is away on business.That happened recently.Julia, who works as an agent for XYZ Construction, entered RR Consulting's office and asked to speak to "someone in charge." Carmen stepped forward and falsely identified herself as "one of the owners of this business." Julia then explained a building project that XYZ had under development and asked if RR Consulting would be willing to provide its services.Carmen agreed to the proposal and signed a contract "on behalf of RR Consulting." When Romeo returned to the office, however, he refused to have anything to do with that agreement.Who, if anyone, is most likely to be held liable to XYZ?