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

Express authority is created by:

Which of the following is true regarding the requirements of ratification?

An agent is not liable for making an unauthorized contract if:

Maple hired Birch to work as a taxi driver for Maple.After a long,hot summer day of city driving and dealing with other rude drivers,Max,another driver,cut Birch off and slightly dented Birch's taxicab.An enraged Birch pulled Max out of the car and hit him with a brick that was lying on the road.Max suffered serious and permanent injuries and wants to sue.Who is liable in this situation?

Abel was employed as a security guard for Seep Corporation.Abel's job was to guard a fenced-in area and to use force to keep intruders from climbing the fence to enter the plant.His working hours were from 8:00A.M.to 5:00 P.M.At about 11:00 P.M.one evening,Abel drove past his place of employment.He saw a teenager named Johnny climbing the outside of the fence that he guarded during the day.Angered by this violation of Seep's property rights and by the fact that Johnny had called him a "potbellied moron" only three days earlier,Abel stopped his car,ran up to the fence,pulled Johnny off of it,and beat him up.Johnny sues Seep Corporation for Abel's assault and battery (both intentional torts).Which of the following is most likely to be the court's verdict?

_____ means that the principal's rights and liabilities are what they would have been if the principal had known what the agent knew.

An agent who has total control over a piece of property has implied authority to contract for repairs.

Pete tells Alice,his sales agent,that under no circumstances does she have authority to make any warranties covering goods she sells for Pete.No third party knows about Pete's limitation on Alice's authority.Alice goes out and provides warranties in a sale to Tom.The warranties that Alice makes are customary in the trade,Tom knows this,and Tom knows nothing about the limitation on Alice's authority.Did Alice have implied authority to bind Pete? Discuss Alice's apparent authority?

Sometimes,if an agent incurs tort liability the principal is required to _____.

Apparent authority protects third parties who reasonably rely on the principal's manifestations that the agent has authority.

Nina hired Sue to work as a janitor in Nina's apartment building.Sue was negligent in that she left a crack in the marble staircase unrepaired,without putting up a warning sign.Seth slipped on the staircase and suffered severe injuries.Who is liable for this accident?

A principal will not be liable to a third party for a tort committed by an agent:

Estoppel is the concept that a principal may be liable to a third party if that party justifiable believed that the agent had authority to act for the principal and there was a detrimental change in the third party's position.

The state of Indiana hires the Reliable Construction Company to do some excavation work on an interstate highway.The state lays out the general objectives that Reliable has to achieve,but the details of the job are up to Reliable.The job involves digging holes ten feet deep,the whole way,across the highway.Given the nature of the job,it's important that Reliable be especially careful in putting up flashers and warning signs to steer oncoming motorists onto a detour.Reliable,however,does not do an adequate job in this regard and motorists are continually driving their cars into the construction area at high speed.One of these drivers,Tim,is unable to stop in time,and drives his car into the hole,suffering severe personal injury and damage to his car.Tim sues Reliable and the state for Reliable's negligence.In this case:

What is the nature of the principal if a third party knows that the agent is acting for the principal and also is aware of the principal's identity?

Which of the following is true of implied authority?

Susan is hired to manage a business.This means that she has the authority to make contracts that are reasonably necessary for conducting the business.This is called:

Hillary tells Iris that she wants to buy Iris's house "on behalf of a party who wishes her identity not to be known." The party is Baker Associates.With Baker's consent,Hillary contracts with Iris on Baker's behalf to buy the house.What is Hillary's liability on this contract?

In which of the following cases is the agent,but not the principal,liable?

An agent who purports to act for a legally nonexistent principal is personally liable when the agent knows or has reason to know the principal does not exist.