Exam 29: Relationship With Third Parties

Under the Second Restatement,the bankruptcy of the principal terminates,without notice,the power of an agent to affect the principal's property that passes to the bankruptcy trustee.

An agent may agree to become liable on a contract between a principal and a third party in all but which of the following ways?

Match each statement with the correct term below. -agent

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Timothy,a prospective purchaser.The next day,Richard sends a letter to Sarah revoking her authority,but he fails to notify Timothy.Sarah:

Bob is the promoter of a new corporation that has not yet been incorporated.On behalf of the as yet unincorporated business,he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The corporation is liable on the contract,because Bob is its agent.

Edward is hired to manage Fred's business.Which of the following is untrue regarding Edward's authority?

A person may ratify a prior unauthorized act and may later revoke the ratification.

Paul is a truck driver who owns his own truck and delivers loads to various companies for nine months out of the year.For the hard winter months,Paul goes to Key West to "put his feet in the sand." One evening while delivering a load for Emblem Helicopter Parts Co.,Paul got into a "little scuffle" with a rowdy trucker who was giving Nell,a waitress at the DewDrop Inn Cafe,a hard time.Paul knocked out five of "Rowdy's" teeth.Rowdy is suing Paul and Emblem for his injuries.Discuss whether Rowdy will win against Emblem on the issue of: (a)respondeat superior and (b)unauthorized acts of agents.

The power of an agent is her ability to change the legal status of her principal.

Which of the following is not correct regarding the relationship between an independent contractor and a principal?

A person who undertakes to make a contract on behalf of another person gives an implied warranty that he is in fact authorized to make the contract on behalf of the person he purports to represent.

Which of the following is true regarding an agent who is acting for an undisclosed principal?

An agent,at his principal's direction,fixes prices with the principal's competitors.The result is:

Gary hires Doug to burn off his fields to kill the weeds.If the fire gets out of control because of Doug's negligence and the fire damages Philip's wood fence:

An employer may have criminal liability for the acts of an employee.

Nell exceeds her authority when making a contract for Denver.If he ratifies the contract, both Nell and Denver are in the same position as the one they would have been in had Denver actually authorized the act originally except that Nell is not entitled to compensation.

Dan,an agent for Ramona,sees what he thinks is a good deal for Ramona.Without asking whether he has authority to negotiate the deal,Dan enters into a contract on Ramona's behalf.Ramona says later that she isn't interested.Is Ramona liable on the contract? Is Dan liable on the contract?

Actual authority consists of both express and implied authority.

An agent is not normally liable on a contract he makes with a third party on behalf of a(n):

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.