Exam 32: Agency Formation and Duties

If a great degree of skill is required, this may indicate that a person is an employee hired for a specialized job and not an independent contractor.

Agency relationships do not permeate the business world.

Through agents, a principal can conduct only one business operation at a time.

Build-It Construction Company contracts with Classic Beverage Corporation to build Classic Beverage's corporate headquarters. Build-It Construction contracts with Dependable Tools & Materials Inc. for construction supplies but refuses to pick up the order. Meanwhile, Classic Beverage hires Elmo, a certified public accountant, to work in its cost-accounting division as an employee, with no authority to hire or supervise others. Elmo asks Fayette, an outside experienced accountant, to advise him on certain accounting procedures but fails to pay Fayette for the service. Classic Beverage also contracts with Gloria, a salesperson, to solicit orders for its products in a designated territory. Gloria obtains an order from Highpoint Concessions, Inc., which is assured the order will be filled soon. But Gloria does not follow through with the paperwork and fails to submit the order to Classic Beverage. Highpoint Concessions suffers a loss. Dependable Tools, Fayette, and Highpoint Concessions claim Classic Beverage is liable under agency law. Discuss fully whether an agency relationship was created by Classic Beverage with Build-It Construction, Elmo, or Gloria.

Largo is an agent for MaryElise. MaryElise gives Largo clear instructions to enter into contracts on her behalf only on Mondays, Wednesdays, or Fridays. Largo enters into a contract on her behalf on Tuesday. Largo has breached

Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is

Ingmar asks Jessie to contract with Jessie's high school classmates to babysit Ingmar's new baby. Jessie orally agrees to do so. This is

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is

Donato is Equipment Repair Service Company's chief executive officer. On Equipment Repair's behalf, Donato solicits business, hires and fires workers, and handles finances. Equipment Repair pays Donato varying amounts, depending on his "needs." Donato is most likely

Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales's right not to perform a contract entered into by Jeremy, if he breaches their agency agreement, is the right of

Whether a worker is an employee or an independent contractor has no effect on the employer's liability for the worker's actions.

An agency relationship created for a purpose that is contrary to public policy may still be enforceable.

An agent can represent two principals in the same transaction as long as neither of them knows about it.

An agency agreement can be implied by conduct.

Yoshi contracts with Zach to buy a certain pub, Aficionado's, for Yoshi, who asks Zach not to reveal her identity. Zach makes a deal with Burcet, the owner of the pub, and makes a down payment. Yoshi fails to pay the rest of the price, and does not pay Zach for his services. Does Zach have any recourse against Yoshi? If so, on what basis and to what extent?

Elaine owns the Fabric & Yarn store. Goldie is a salesperson in the store. When Goldie makes a sale to Heather, the sale is binding on

Investment Holdings Corporation hires Jerilyn, a business appraiser, to locate investment possibilities for Investment Holdings. Jerilyn learns of a salsa and hot sauce manufacturing company avail?able for a reasonable price, but neglects to tell Investment Holdings. Most likely, Jerilyn

Even during emergency situations, when the principal cannot be consulted, the agent may not deviate from the principal's instructions without violating the duty of obedience.

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity, Rosario is

Rondi holds herself out as possessing special accounting skills. As an agent, she must exercise the degree of skill or care expected of