Exam 20: Agency and Other Methods of Carrying on Business

TopCo Inc appointed Ethel as its agent to negotiate a building lease on its behalf with DeGroot Realty Inc.At one point in the negotiations,DeGroot says to Ethel that it will buy her a new car if the negotiations are completed by the end of the week.Ethel cannot accept the car unless she obtains the permission of TopCo.

Tony is a sophisticated business person.Tony's stock broker advises him to buy 1000 shares of Q-Tel at the current market price of $10 per share.The broker's advice is based on a careful assessment of the market and Tony's advice to the broker about his risk tolerance.Tony takes the advice and directs his broker to buy the shares.The shares turn out to be a very bad investment and,after six months,are worthless.Tony has no claim against his broker.

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?

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

Berta has entered into an agreement with Boys R'Us Inc to operate a men's clothing store as a franchisee in Scarborough,Ontario.Boys R'Us operates franchise stores in all provinces and has a great reputation as a place where men can get good quality clothes for a good price.One of the advantages to Berta of operating a men's clothing store as a Boys R'Us franchise is that she will likely obtain a licence of the Boys R'Us trademark and the assistance of Boys R'Us in the operation of the business.

Jasmine enters into a contract to provide limousine services to Erin.Later,Jasmine tells Erin that she was acting as an agent on behalf of Big White Limousine Services Ltd.Which of the following is TRUE?

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?

Agency relationships arise in which of the following circumstances?

Jeremy is a singer.For several months,he and his friend George have discussed the fact that Jeremy needs an agent if he is to move forward with his career.George has proposed that he be that agent.Jeremy has never agreed to George acting as his agent.A few weeks later,however,George attended a negotiating session between Jeremy and a record company.After several hours,George said that Jeremy would agree to the terms of the recording contract proposed by the record company.Jeremy said nothing.There is a contract between Jeremy and the record company.

Silken is a producer of snowboards.She wants to enter into a commercial representation agreement with Jason.Under the agreement,he will sell her snowboards on her behalf to retail ski shops.Which of the following is TRUE?

The concept of "apparent authority" is also sometimes known as

Four people,who are not partners,buy and sell a large number of apartment buildings.One of them,Marius,enters into a listing agreement with a real estate agent to sell one building.Marius says that he has authority to bind all four owners to the listing agreement.In fact,none of the others have authorized Marius to enter into the listing agreement,and they have no intention of selling their interests in the building.Which of the following is TRUE?

Sharona entered into a contract with Deepak.Under the terms of that agreement,Deepak was obliged to sell his car for $25 000 to Myrna.Sharona subsequently asked Myrna to ratify the transaction and to actually pay the price to Deepak in exchange for the vehicle.Which of the following statements is TRUE?

Satinder is an employee of Bog Systems Inc.She acts as an agent on behalf of the corporation in that she buys office furniture on behalf of the corporation.Which of the following is TRUE?

Information Highway Inc enters into an agreement with Groulx under which Groulx agrees to act as Information Highway's agent in obtaining a permit for Information Highway to build an office tower in St.John.Groulx pays a bribe of $1000 to an employee of the city to issue the permit.Information Highway must reimburse Groulx for the bribe because it is an expense incurred in performing his responsibilities.

Sureeya sells jewellery 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?

Grosjean is employed as a truck driver by Newcastle Co.One day while he is making deliveries for Newcastle in its delivery van,he notices that the van is low on gas.He uses his own money to buy gas so that he can 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.

You have started a new company that manufactures curling brooms and are looking to sell the product.Marco has worked as a distributor of curling supplies for the last 3 years and has many connections in the area.You want to enter into a relationship with Marco in order to help sell to the retailers in the area,but you are worried about liability under contract.The best thing to do is

An agent can be liable for a contract that it negotiates on behalf of an unidentified principal.

Hadi wants to buy a car,but he knows nothing about them.He asks his friend,Devon,to act as his agent and buy him a car because Devon works as a mechanic.Devon contacts Nadia,who is selling two cars.One car is in perfect condition and the other needs a new part in the engine.Devon buys both and keeps the car in perfect condition,giving Hadi the one that needs work.Which of the following is true regarding the situation?