Exam 36: Third-Party Relations of the Principal and the Agent

The process by which a principal binds himself to an unauthorized act done by an agent,or by a person purporting to act as an agent,is called ______.

Direct liability is also known as respondeat superior liability.

What is the term for when a principal may be forced to be liable for an agent's actions to a third party based on a detrimental change in position of the third party and a reasonable belief that the agent was truly acting with the authority from the principal?

Typically a principal is not held liable for the actions of a nonemployee agent,but an exception to this general rule is:

Stan hired Mason to work as a janitor in Stan's apartment building.Mason was negligent.He left the floor in the building lobby wet and slippery,without putting up a warning sign.Martha slipped and fell on the wet floor.If Stan is liable for this accident,what is the source of his liability?

Exculpatory clauses that try to relieve a principal of liability for an agent's misrepresentations usually insulate the principal from tort liability and prevent the third party from rescinding the contract.

In some cases,both principal and agent sometimes are liable for an agent's torts.

Adam hired Kim as his agent to drive a cab.On his first day on the job,Kim hit a pedestrian who suffered serious injuries.The pedestrian wants to file a suit against both

Ordinarily a principal is not made liable for any of the torts committed by:

It is always necessary for an agent to disclose the identity of the principal to any third person with whom he is contracting;else the contract becomes void.

Kin is an agent for a disclosed principal,Tracy.Kin contracts with Phil on Tracy's behalf.Kin becomes liable to Phil when:

Which of the following states that the agent has authority only to make representation contained in the contract and that only those representations bind the principal?

Ralph,the owner of a medium-sized business,which is operated as a sole proprietorship,gives his vice-president,Wanda,authority to hire a new manager for the firm.Ralph gives Wanda detailed instructions about the salary she can contract to pay,but tells her that under no circumstances can she make commitments regarding the new manager's pension.Wanda contracts to hire Nick for the new managerial position.But to get Nick to sign up,she has to make certain specific pension commitments to him.Some years later,Nick sues Ralph for copping out on those pension commitments.Which of the following is true in this case?

An agent's implied authority is always considered superior in law,and thus can contradict principal's express statements.

The doctrine of respondeat superior means:

_____ is the authority the principal wants the agent to possess and is based on the principal's communications or manifestations to the agent.

Ordinarily,an agent is not liable for unauthorized acts made on behalf of a principal if:

Ratification is a process whereby a principal binds himself to an unauthorized act done by an agent,or by a person purporting to act as an agent.

A principal can ratify an agent's unauthorized contract even if the third party withdrew from the contract prior to ratification.

Andy works for Sparkles,a jewelry store.While selling a zircon-studded ring to a customer,Andy falsely states that the zircon is a diamond.The customer,delighted to find a diamond ring at an affordable cost,buys the ring.If the customer files a lawsuit for damages,which of the following will most likely be the court's verdict?