Exam 17: Management of Employee Conduct: Agency

The IRS is conducting an investigation of the construction industry because contractors routinely classify carpenters, dry-wallers, and plumbers who work on all of their projects as independent contractors. These craftsmen report for work on different jobs, but all of the jobs are managed by the same contracting firm. Which of the following will be most important in determining whether the craftsmen are employees rather than independent contractors?

The purpose of anti-retaliation statutes is to protect:

Which is a requirement for the creation of an agency relationship?

Express authority:

Public notice of termination of an agent is not required.

In which of the following situations does the agent have no liability to third parties?

Which of the following functions would be implied authority for an apartment manager?

The intentional torts of agents are never the responsibility of the principal.

Ellen Fishman was hired by Attics, Inc., a company that does attic refurbishments and redesigns, to evaluate attics, provide homeowners with estimates, and, hopefully, sign them up with contracts for their attics. Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic. Because she was new at the job, Ellen forgot the demolition costs in the estimate. However, the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1,100. Attics, Inc.'s president has refused to do the attic for anything less than $15,000, what the estimate should have been. The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment, which was $12,500.

Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont is sent to various branches throughout the state to do audits and has an accident while en route to one of the audits. Which of the following statements is true?

James Schoenberger interviewed for a position with the Chicago Transit Authority (CTA). He talked with the person who would ultimately be his supervisor, Zu Christian, and was offered a salary of $19,300. Under CTA procedures, only the Placement Department could give final salary figures. When Placement's figure for Schoenberger was computed, it was lower, and Schoenberger sued for the higher figure. CTA claimed Zu Christian had no authority to offer a particular salary. Discuss the legal issues in the case from both CTA's and Schoenberger's perspectives.

Principals are liable for the acts of independent contractors if:

The duty of loyalty of an agent to a principal does not cover conflicts of interest.

"Talk to Ann. She used to work here, but I think she is the best one to get this deal done for us," is an example of express authority given to an agent.

All states recognize non-compete agreements as enforceable contract clauses.

In a master-servant relationship, the principal most likely will need to do which of the following?

Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice) but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is true?

Ratification of a contract by a principal releases the agent from all liability to the third party.

In which of the following situations is an agent liable to third parties?

Zaney, Inc. operated Zaney's Bar and Grill. An officer of the corporation instructed the bartender at Zaney's to "maintain order" at the bar. The bartender pulled out a gun and shot a patron because he was making advances to the girl sitting next to him. Which of the following is correct?