Exam 19: Secured Transactions and Bankruptcy

Which of the following is the term used to describe the duty an agent has to perform responsibilities of the principal as specified in the agency agreement?

Reference - Roofing Issues. Sally agrees to roof a house for Bob. After doing his research, Bob chose Sally based on her great reputation for being conscientious and doing good work. Bob knows little about roofing and stays away from all the noise involved. Sally provides her own tools for herself and other workers, sets her own schedule, and charges a flat rate of $10,000 to be paid when the job is completed. Sally hires Trudy, Glen, and Fred to help with the roofing. She pays them an hourly rate, supervises their work, provides them with tools and materials, and sets their schedules. Curious about what is going on there, Bob's friend Spencer walks by the house while the roofing is being done. Glen absent-mindedly throws some old shingles off the roof and hits Spencer in the head resulting in him going to the local emergency room and receiving a couple of stitches in his scalp. Spencer decides to sue all the roofers and also Bob and Sally for his hospital expenses and for pain and suffering. Which of the following is the most likely characterization of Trudy, Glen, and Fred in relation to Sally?

Which of the following was the result on appeal in Reading Radio, Inc. v. Fink, the case in the text in which it was alleged that before leaving his job, an employee breached his fiduciary duty of loyalty by actions including diverting employees to a new employer and by failing to enforce covenants-not-to-compete?

Melinda, who works in a jewelry store owned by Cindy, was picking up some gem stones for use in the store. On the way back to the jewelry store, she went through a drive-through fast food restaurant to get a soda. While in line, she negligently bumped the vehicle in front of her which was owned by Ralph. Melinda did not have insurance. Ralph asked Cindy to pay for the damage to his bumper. Cindy refused on the basis that she never gave Melinda authority to stop for a soda. Should Cindy be held liable, and why or why not?

Upon which of the following is the equal dignity rule based?

Reference - Roofing Issues. Sally agrees to roof a house for Bob. After doing his research, Bob chooses Sally based on her great reputation for being conscientious and doing good work. Bob knows little about roofing and stays away from all the noise involved. Sally provides her own tools for herself and other workers, sets her own schedule, and charges a flat rate of $10,000 to be paid when the job is completed. Sally hires Trudy, Glen, and Fred to help with the roofing. She pays them an hourly rate, supervises their work, provides them with tools and materials, and sets their schedules. Curious about what is going on there, Bob's friend Spencer walks by the house while the roofing is being done. Glen absent-mindedly throws some old shingles off the roof and hits Spencer in the head resulting in him going to the local emergency room and receiving a couple of stitches in his scalp. Spencer decides to sue all the roofers and also Bob and Sally for his hospital expenses and for pain and suffering. Assuming Glen was negligent, which of the following is the most likely result in a lawsuit against Sally brought by Spencer?

Reference - Cheap Principal. Jason, who is very knowledgeable regarding computers, agrees to purchase computers for Nick's business. Jason is retained for that purpose only, he is paid a set rate for the job, and Nick exercised no control over the manner in which Jason did his work. Jason purchased computers on credit from ABC Computers without any mention of Nick. The computers worked well and were not defective in any way. Unfortunately, Nick did not pay ABC Computers on a timely basis. Jason, therefore, paid ABC Computers out of his own pocket because he wanted to be able to do business with ABC in the future and also because his name was on the invoice. Jason asked Nick for reimbursement, but Nick refused. Nick claimed that if Jason had only waited, ABC Computers might have agreed to take less. Did Jason have any legal liability to ABC Computers?

Which of the following is true regarding agent liability when a third party gets a judgment against a previously undisclosed principal?

Reference - The Big Sale. Christy, the owner of ABC department store, needed to hire a number of employees in a hurry because of a planned big summer sale. Bob was hired by Christy to run a cash register and to assist customers with taking large purchases to their cars. Bob encountered a particularly annoying customer, Frank. Frank started complaining the minute he saw Bob. Frank complained about having to wait for Bob to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Bob tried to control himself while he carted Frank's television to the car. The final straw, however, came when Frank told Bob that he should get the earring out of his ear, cut his hair, and act professionally. Bob threw the television to the ground and punched Frank in the nose. Frank did investigation and discovered that Bob has just been fired from his last three jobs for violent actions against customers. Two of his former employers are willing to testify that if Christy had called them, they would have disclosed Bob's tendencies to her. Bob listed the former employers on his application, but because she was in a hurry to hire employees, Christy did not take the time to check with the former employers. Another problem confronting Christy during the big sale is that Susie, a long time employee of Christy who had never caused any problem before, negligently dropped a box on the foot of Greg, a customer. Greg had to have an X-ray and is threatening to sue both Christy and Susie. Which of the following is a theory under which Christy may be held directly liable for her own tortuous conduct in regards to Frank's injury?

Set forth the rationale behind the doctrine of respondeat superior and discuss whether ethically you believe is an appropriate doctrine for our society.

Which of the following refers to the right of a principal to sue an agent to recover any amount assessed against the principal for a breach of contract caused by the agent's negligence?

Express authority is often referred to as ______________ authority.

Which of the following is false regarding termination of agency based on operation of law?

An individual who lacks contractual capacity may hire an agent to make contracts on his or her behalf.

When a principal is classified as a[n] ______________ principal, a third party is aware that an agent is making an agreement on behalf of a principal and the third party also knows the identity of the principal.

Discuss why agency is especially important for modern firms doing business in foreign countries.

Singapore outlawed the use of electronic contracts.

Reference - High Maintenance. Paul, who runs a retail jewelry store, went with Jane, to whom he was engaged to be married, to a wholesale jewelry store. Paul had no express, written agreement with Jane by which she was his agent. In fact, Paul had told Jane not to buy anything at the store. The wholesale jeweler, Pam, asked Paul if Jane was buying for him. Paul did not want to embarrass Jane so he nodded in agreement. A few minutes later Paul reminded Jane, outside the hearing of the wholesaler, that she should not make any purchases. Paul and Jane had a big disagreement over money that evening, and Jane broke off their engagement. The next day Jane went back to the wholesale jeweler and purchased a string of pearls for $2,000. Jane also purchased a fur jacket for $3,000 from a store owned by Harry that was next door to the jewelry store. She told Harry that Paul wanted a fur jacket for a model in his store and that Paul would be glad to pay Harry for the jacket. What type of agency, if any, did Jane have to act on behalf of Paul as far as Pam is concerned?

Reference - Nasty Break-Up. Harold wants to purchase a lot next door to Sarah's home that is owned by Sarah. Harold knows Sarah will not sell the lot to him because they dated in the past and had a nasty break-up. Harold agrees with Alice that Alice will purchase the lot from Sarah for him. Alice and Sarah reach an agreement and enter into a contract whereby Sarah is to sell the lot to Alice for a price within the scope of Alice's authority. Alice tells Sarah nothing about her plan to later transfer the lot to Harold. Before title to the lot is transferred to Alice, Harold tells Alice that he no longer wants the lot. Alice tells Sarah about Harold. Sarah tells Alice that as far as she is concerned, Alice has bought the lot. Sarah says that she plans to move anyway and really does not care whether Alice or Harold end up with the lot. She just wants her money. Which of the following is true regarding whether Harold is liable to Alice for the cost of the lot if Alice pays Sarah the purchase price?

A ______________ trust is an equitable trust imposed on one who wrongfully obtains or holds legal right to property he or she should not possess.