Exam 29: Relationship With Third Parties

Paul,acting without authority,makes a contract with Ed,supposedly on behalf of Shawna.Shawna may ratify the contract,even if Ed loses contractual capacity before she ratifies the contract.

Frank,acting as a promoter for Garleen Co.,a corporation not yet in existence,makes a contract with Towne Supplies.When Garleen Co.is formed,it may:

Match each statement with the correct term below. -actual authority

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

If an agent tortiously injures a third party,the third party may not hold the principal personally liable.

Usually in cases where there is a known principal,the agent has liability for,and rights under,contracts made on behalf of a principal.

The court in Connes v.Molalla Transport System,Inc.found:

Match each statement with the correct term below. -independent contractor

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the scope of his employment.

Compare and contrast ratification and adoption of unauthorized contracts.

Name the two basic types of authority with regard to agents and explain the difference between them.

Discuss the fundamental rules of contractual liability between a principal and the third party.

Match each statement with the correct term below. -partially disclosed principal

Match each statement with the correct term below. -ratification

Gerald,an agent,who makes a contract with Adele on behalf of Leon,an unidentified principal,may maintain in Gerald's own name a breach of contract action against Adele.

Match each statement with the correct term below. -vicarious liability

The principal may ratify either the entire contract or the part that is advantageous to the principal.

An agent acts for a(n)__________ principal when the agent appears to be acting on her own behalf and the third person with whom she is dealing has no knowledge that she is an agent.

A subagent owes a fiduciary duty to both the agent and to the principal.

Upon the termination of an agency,the agent's actual authority ceases.However,apparent authority may continue until actual notice of the termination is given to third parties.