Exam 11: Agency

In Hannington v. University of Pennsylvania, the court had to determine whether an attorney acted under apparent authority regarding the negotiation and signing of a settlement agreement. The court determined that:

If an agent suffers losses while acting for the principal, the principal has a duty to indemnify the agent for those losses.

In Edgewater Motels Inc., v.A. J. Gatzke and Walgreen Company, Gatzke, an employee agent of Walgreen, while filling out expense reports under the scope of his employment, accidentally started a fire due to careless smoking, severely damaging the Edgewater Motel. With regard to the smoking the court determined that:

In California, courts determine independent contractor status by considering each of the following except:

Actual authority is the authority that the third party may reasonably assume that the agent possesses.

Agency law generally exists on the state statutory level and is based on:

One who agrees to act and is authorized to act on behalf of another, a principal, to legally bind the principal in particular business transactions with third parties pursuant to an agency relationship is the ___________.

If an agent possesses important facts directly related to his agency relationship but withholds those facts from the principal, the agent has breached her duty of _____.

In an agency relationship, one party agrees to act as an agent for another party.

Name the five agent duties that comprise the agent's fiduciary responsibility to the principal.

Vince is a general contractor who hires Brad to install plumbing in a government building under construction. The morning that Brad is to begin work, Vince discovers that Brad has lost his plumbing license and is no longer eligible to do work on government buildings. When Brad shows up ready to work, Vince informs him that he can't use his services and sends him away. The agency relationship terminated due to operation of law.

Liability involving one party's liability for another party's act is called ________ liability.

Clyde has been hired to deliver a truckload of hogs to a cross-state slaughterhouse. On the way there he stops to visit his girlfriend Samantha, who lives five minutes off his prescribed route. He spends five minutes with her. During those five minutes he is considered to be on a _____.

In which of the following situations is the agent not liable should the principal breach the contract with the third party?

An agent may work for two principals at the same time if the agent deals fairly with both.

Jack is a truck driver employee of Ace Trucking. While delivering his cargo, he sees that the truck assigned to him is low on gas. Jack pulls into a convenient station and puts $50 worth of gas into the truck, which will allow him to complete his assignment and return to the depot.

Whether an agency is classified as disclosed, undisclosed, or partially disclosed, the principal has the duty to fully perform the contract obligations.

With regard to negligent hiring, the courts would require the least amount of scrutiny regarding:

One significant benefit of an employer's completing an IRS Form SS-8 is that even if the employer does, in fact, misclassify a worker, the proper completion of the form may evidence a good faith effort by the employer, reducing or even eliminating IRS penalties for misclassification.

Donald is an agent representing Xmart, a large department store chain. Xmart has sent him to deal with Fred in regard to purchasing Fred's land in order to erect a new store. When Donald first meets Fred, Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on Xmart's behalf. Xmart sends Fred a written confirmation of Donald's authorization to act as its agent and states that a contract signed by Donald will be honored by Xmart. Donald and Fred meet every other day during the negotiations. While the negotiations are still ongoing, Donald is fired by Xmart because it doesn't feel that he is making sufficient progress. Why is it important for Xmart to communicate with Fred regarding Donald's firing?