Exam 29: Relationship With Third Parties

In general,an undisclosed principal and the third party to a contract are contractually bound if the agent acts within the scope of his actual authority in making the contract.

A principal's intention to permit the agent to delegate granted authority may only be gathered from the express authorization of the principal.

Match each statement with the correct term below. -duty of obedience

Gaines delivers a chair for Jasper Furniture and,before he goes back to the store,he goes 15 miles out of the way to visit a friend.On the way,he negligently runs a stop sign and hits Rick.Who can be held liable for the accident,and why?

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

Ratification may relate to acts that have exceeded the authority granted to an agent.

Apparent authority may arise by an agent's showing a third party a document from the principal authorizing the agent to enter into such a transaction.

Under the rule of the Third Restatement,if a principal becomes incapacitated,the agency relationship terminates and all authority ceases.

Sunset Properties,Inc.hires William to manage its 42-unit apartment complex.Nothing is said as to expenses.William purchases fuel to heat the apartments and arranges for a repairperson to do ordinary maintenance.William will be personally liable for these expenses,because he has no authority to incur them.

An example of successful land purchases made by agents for an undisclosed principal took place in Florida for Walt Disney Productions.

Match each statement with the correct term below. -duty of diligence

In the Parlato v.Equitable Life Assurance Society of the United States case,the court held:

A subagent is an agent of both the principal and the agent.

A principal may be liable where his agent sells liquor to an underage person even though the principal did not authorize the act.

Which of the following is correct with regard to the doctrine of respondeat superior?

The doctrine of respondeat superior is most often applied in situations involving:

Identify three ways an agent may agree to become liable on a contract between the principal and the third party.

When is a principal liable for her own conduct in tort involving the use of agents?

Unless otherwise agreed,an agent making a contract with actual or apparent authority on behalf of an unidentified principal is a party to the contract.

Match each statement with the correct term below. -undisclosed principal