Exam 20: Agency and Other Methods of Carrying on Business

Seldon owned several apartment buildings.Sheila is the president of Ivest-co Inc,a corporation incorporated under the Canada Business Corporations Act.Sheila entered into a lease with Seldon to rent some office space in one of Seldon's buildings on behalf of Invest-co.Seldon was confident that the lease would be enforceable against Ivest-co Inc because the president of the corporation had signed the lease on behalf of the corporation.Unknown to Seldon,the by-laws of the corporation said that the corporation could only enter into leases if two directors of the corporation signed them.Discuss whether the lease is enforceable.

Nora has entered into a joint venture with Scott to sell diet supplements.They have set up a corporation to carry on the business.They are the sole shareholders and directors.Nora is the president.Which of the following are TRUE?

You contract with Sal,a stock broker,to act as your agent to buy stocks for you.You specifically instruct Sal that you only want him to buy stocks for you that have a good dividends payment history.Sal carelessly buys you some shares that have never paid dividends.Which of the following describes a legal basis upon which you could claim relief?

Digital Technologies Inc entered into an agreement with Gray under which Gray agreed to act as Digital's agent for the purpose of finding new offices for Digital.Gray had never done this kind of work before and Digital knew this.He found offices that he believed would be satisfactory to Digital,and Digital entered into a five-year lease.Unfortunately,it turned out that the offices did not have air-conditioning and so could not be used in the summer,making them completely unsuitable for Digital.Gray had forgotten to ask about air-conditioning.Anyone with experience as a real estate agent would have found out about this problem.Which of the following best describes Gray's legal position?

Minnie and Maximum Realty Inc have entered into a real estate agency agreement.In this situation,it is almost certain that

How can a principal manage the risk that an agent will commit the principal to contracts that it does not want to be bound by?

Alannis is an agent but not an employee of Tesky's Inc,a large department store business.She acts as an agent for the corporation in entering contracts with suppliers to buy clothes.While she is on a trip to Toronto to visit a long-time supplier,Tesky's goes bankrupt.The next day,Alannis,while still unaware of the bankruptcy,enters into a contract with the supplier on behalf of Tesky's to buy $20 000 worth of clothes.Which of the following is TRUE?

Deanna has created a company,Text Styles,which sells a single product - gloves that do not have to be removed when operating a smartphone.The supplier of the gloves lists her on their website as an "authorized seller" of the gloves.If a customer had a complaint about gloves purchased,which of the following would be true?

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 is concluded by Mori on behalf of Garvie with Joseph for the rights to that screenplay.In November,Mori enters 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.

A commercial representation agreement

Alma contracts with Comvey Corp to act as its agent in purchasing fork lift trucks.Alma told Comvey that she did not know anything about fork lift trucks or Comvey's business but was willing to learn and happy to have the opportunity.Comvey said that it would train her but the training never occurred.Comvey needed five forklift trucks to operate a freight terminal.Alma bought five forklift trucks for Comvey.It turned out that the trucks were too large for use in the terminal.Comvey cannot get its money back.It has an action for breach of duty of care against Alma for damages to compensate for its losses.

Nathan and Oliver are fishermen.They agreed that Oliver would take Nathan's fish to the market in Vancouver and sell them on Nathan's behalf along with Oliver's own fish.Oliver took Nathan's fish and his own fish to the market and set up a stall.As it happened,Oliver sold all of his fish and only half of Nathan's fish.Oliver did nothing to try to promote the sale of his fish over Nathan's.He simply put all the fish on a table in two piles and let the customers choose.Which of the following 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.

Alice entered into an agreement with a real estate agent to help her find a house in Windsor,Ontario.Alice found a house that she wanted and asked the agent to present an offer on Monday.The agent got busy with some other work and did not present the offer until Wednesday.Unfortunately for Alice,the owner of the house accepted another offer presented on Tuesday.Describe the bases upon which Alice could seek relief from the actions of the agent.

Ruby is a junior sales clerk employed in the sporting goods department of Lear's,a large department store.Because of her work she gets to know Basinger,the supplier of tennis racquets to Lear's.After talking to Basinger for some time,she asks Basinger if it would agree to sell 100 tennis racquets to Lear's for 10 percent less than the price Lear's usually pays if Lear's would agree to send all its racquet stringing and repair business to Basinger.Basinger agrees to this proposal.That afternoon,Ruby advises the president of Lear's about the deal she has worked out with Basinger.The president says that while she likes the price reduction,Lear's cannot accept the commitment regarding the stringing and repair business.Lear's has an existing commitment to send all such business to someone else.Is Lear's bound by the contract negotiated by Ruby? Can Lear's accept the contract excluding the commitment to send Basinger all the stringing and repair business? Can Ruby have the contract ratified by Beaton's,a competing department store? Is Ruby bound personally?

Romeo is an engineer and owns RR Consulting.His wife,Carmen,though not actually involved in the company,often helps out around the office.One day,when Romeo is out and Carmen is alone in the office,an agent representing XYZ Construction comes in to contract Romeo's services.Carmen tells the agent that she is one of the owners of the company and that they would be willing to do the work.When he gets back,Romeo refuses the job.Who bears the liability?

Stein has agreed to act as an agent for Tayman Resources Inc for two years.Under the agreement,Stein is responsible for finding mining claims for Tayman to invest in.During the two-year term,Stein has agreed not to work for anyone else.No other terms have been agreed to in the agency agreement.Which of the following is TRUE?

Artemis has entered into a contract with Saskatoon Berry Pies Inc for the supply of pies.After the contract was entered into,Artemis disclosed that he was negotiating the contract on behalf of ABC Food Mart,which operates three grocery stores in Regina,Saskatchewan.Which of the following best describes the situation with respect to the contract?

For many years,Street Sounds Inc,a music retailer,purchased its supply of CDs from Smithee Entertainment Ltd,a major music producer.And for all of those years,Smithee Entertainment entered into those supply contracts by using Alan as its agent.Alan would meet with the manager of Street Sounds,that manager would request a selection of CDs,immediately pay for the order,and Alan would arrange for Smithee Entertainment to deliver the goods to Street Sounds within one week.In March 2010,as he had done countless times before,Street Sounds' manager met with Alan,selected a number of CDs,paid for the order by giving $15 000 to Alan,and was told that a shipment from Smithee Entertainment would arrive within a week.What Street Sounds did not know,unfortunately,was that Smithee Entertainment had fired Alan several days earlier.Because it has not yet received any money from Alan,Smithee Entertainment refuses to deliver any CDs to Street Sounds.Which of the following statements is most likely to be 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