Exam 29: Relationship With Third Parties

Sarah is planning to incorporate a new landscaping company,"Evergreen and Growin'." She has held herself out as an agent for Evergreen and has contracted to buy a truck,tools,fertilizer,and seed and also has entered into a lease on behalf of Evergreen for an office.When she fails to get the loan from the bank,she cannot start the business,so she cancels all the contracts.What are the consequences?

Actual notice requires a written,not oral,communication to the third party.

Under the Third Restatement,an agent representing an undisclosed principal is discharged from liability if the third party:

An undisclosed principal may result in which of the following?

Which of the following is true with regard to contractual relations between the principal and a third party?

Sam is George's agent.George decides to fire Sam.Mel is an old customer of George's and he has dealt with Sam for over 20 years.Ellie is a prospective customer that Sam has spoken with on numerous occasions in his capacity as George's agent,and George was aware of the preliminary negotiations.Mel orders goods from Sam after Sam has been fired but Mel has no knowledge of the firing.Later,Sam takes an order from Ellie,who does not know of the firing.Using the rules of the Second Restatement,which of the following statements would apply to this scenario?

Regarding the effect of termination of agency on authority,the general rule of the Third Restatement is that:

Rena employs James,a real estate broker,to find a buyer for her home for a price of at least $125,000.James has the actual implied authority to contract for the sale of Rena's home.

Match each statement with the correct term below. -duty to account

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Match each statement with the correct term below. -respondeat superior

An agent is never personally liable for the torts he commits while in the scope of his employment.

Respondeat superior:

No apparent authority exists where the third party knows that the agent has no actual authority.

Match each statement with the correct term below. -power of attorney

The contractual liability of the principal may depend upon whether the principal is disclosed,partially disclosed,or undisclosed.

To effect a ratification,the principal must manifest an intent to do so with knowledge of all material facts concerning the transaction.

Pat bought a cotton sweater at Ivey's Fashion Store.Sue,the salesperson,told her the sweater was guaranteed not to shrink if washed in cold water by hand.Pat washes the sweater as directed,and it shrinks.Which of the following is correct?

Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

Apparent authority arises out of words or conduct of a disclosed or partially disclosed principal manifested to third persons.