Deck 22: Agency Law

Question 1

For the doctrine of respondeat superior to apply,a tort must be committed while the worker was performing a non-delegable duty.

Answer 1

False

Question 2

If an agent becomes insane,it terminates the authority of the agent upon court order.

Answer 2

False

Question 3

Generally,vicarious liability is applied to intentional tort cases because workers are usually hired to commit intentional torts.

Answer 3

False

Question 4

When a person is entitled to receive actual notice of the termination of the agency relationship,the only way to give notice is by certified mail.

Question 5

An employer is always liable for an agent's or employee's crimes,unless employer did not actually aid or participate in their commission.

Question 6

An employee's vicarious liability for her actions is based on the principle of respondeat superior.

Question 7

The "Opening Case" involved a question of Free Exercise of Religion and the tort of clergy malpractice for the plaintiffs' injuries done by the intentional acts of a Catholic priest.

Question 8

At Saint Alphonsus Regional Medical Center,Dr.Schwabb wears a scrub with the words "SARMC" on it.Schwabb,however,has his own practice across town and is not an employee of SARMC.If sued by a patient,Schwabb would not be liable under the doctrine of agency by ratification.

Question 9

An agent can only terminate an agency relationship by a written renunciation.

Question 10

An employer may also be open to liability when the employer hires an independent contractor to perform a job that the law has not permitted the employer to delegate.

Question 11

A durable power of attorney preserves the authority of an agent when the principal becomes incapacitated.

Question 12

In situations with a partially disclosed principal,agents are not entitled to indemnification if they incur a loss or are damaged as a result of a request made by the principal.

Question 13

Agency is a fiduciary relationship between an agent,a principal,and a third party.

Question 14

An independent contractor is an agent with full power to bind the principal,even if the agent is not expressly authorized to do so.

Question 15

The terms master (employer)and servant (employee)mean that the agent is the master and the principal is the employer.

Question 16

An agency coupled with an interest may be revoked unilaterally at any time by the principal.

Question 17

Barstock Enterprises LLC that employs Joseph as a sales agent,files for Chapter 11 bankruptcy protection.The agency continues under apparent authority principals.

Question 18

If John,who is the owner of COSTLESS Enterprises Inc. ,mentions at a cocktail party that he would love Sally (who is standing next to him)to work for him in telemarketing,he has created an agency by estoppel.

Question 19

In the "Opening Case," the main issue was whether the Society had a duty to the plaintiffs because Father Ryan was its employee.

Question 20

Carol,who is doing Mark a favor,is allowed to commingle business and personal funds in her own bank account.

Question 21

Gordon employs Josh as an agent to sell Gordon's house.When does this agency end if the agreement is silent?

A)When the house is sold
B)When Josh locates a possible buyer
C)When Josh decides to look for other employment
D)When Gordon decides to look for another agent

Question 22

Jamie authorizes Amy to sell his house,but does not clarify about the compensation payable to Amy.What amount should be paid to Amy when she sells Jamie's house?

A)Nothing,since agency relationships are assumed to be gratuitous unless an agreement specifies compensation
B)An amount to be determined by arbitration
C)A fair value for the services performed
D)Ten percent of the sales price

Question 23

Repair Garage Company rents tools and stalls to independent auto mechanics to repair cars.Repair Garage allows Joe to print business cards reading "Repair Garage Company-Joe,Certified Mechanic." A customer is unhappy with the repairs Joe made to her car and sues Repair Garage.What legal theory,if any,would allow Repair to be sued by the customer?

A)Express authority
B)Implied authority
C)Apparent authority
D)Incidental authority

Question 24

In which of the following situations can an agent legally appoint a subagent?

A)When the case involves co-agents
B)When the appointment is implied from the nature of the employment
C)When the situation involves a nondelegable duty
D)When the co-agent demands such an appointment

Question 25

Iris represents Drew,an eccentric billionaire who lives alone on a Pacific Island.Although Drew passes away on May 1^st,this fact is not revealed until June 1^st.On May 15^th,Iris enters into a contract with Peggy on behalf of Drew.What is the legal liability,if any,of Iris to Peggy?

A)Iris is liable for a breach of actual warranty of authority.
B)Iris is liable for a breach of implied warranty of authority.
C)Peggy may enforce the contract since Drew's death was unknown,thus Iris has no liability.
D)Peggy may enforce the contract against Iris since she represented a nonexistent principal.

Question 26

Corazon employs Josefina,a C.P.A. ,to represent her in tax liability negotiations with the IRS.Josefina is busy with other clients and delegates the negotiation to Lillian,a non-C.P.A.member of her office.Has Corazon impliedly agreed to this delegation?

A)Yes,Corazon is relying on Josefina's skill and integrity.
B)No,Lillian is a member of Josefina's office.
C)Yes,Corazon must approve in writing any delegation of authority.
D)No,delegations within offices happen regularly.

Question 27

Geoffrey is an agent of Smith's Meat Products Limited.While delivering products,the company's van breaks down.What legal theory,if any,would allow Geoffrey to contract a garage for the repair of the principal's van?

A)Express authority
B)Actual authority
C)Apparent authority
D)Incidental authority

Question 28

Desmond,obeying the instructions of his employer,Bigger Company,sells Harry a computer system that is not capable of being expanded.Harry is now suing Desmond asserting fraud,but Desmond defends that Harry did not request an expandable system.What responsibility if any,does Bigger Company owe Desmond?

A)Bigger has no responsibilities,since Desmond has a defense to fraud.
B)As Bigger's agent following instructions,Desmond is entitled to indemnification.
C)Bigger's only duty is to cooperate while Desmond defends the lawsuit.
D)Bigger's responsibility is to support Harry's lawsuit against Desmond.

Question 29

Smith,an agent,buys and sells used computer equipment on behalf of New Life Technologies,Inc.In the absence of an agreement,which of the following tasks may Smith delegate to Elizabeth?

A)The authority to buy and sell used computer equipment
B)Keeping a record of transactions Smith undertakes on behalf of New Life
C)The authority to estimate the fair market value of used computer equipment
D)The authority to fix the selling price of used computer equipment

Question 30

Bill employs Charles as a real estate agent to sell his house.The house is destroyed by fire.What is the status of the agency relationship?

A)The relationship is applied to the next property Bill sells.
B)It requires Bill to compensate Charles for what he would have received for selling the house.
C)The relationship is automatically terminated.
D)It depends on what is considered reasonable.

Question 31

Betty,the manager of The Great Retail Store,purchases a variety of merchandise on credit.When Betty quits,what notice must The Great Retail Store provide to its creditors?

A)The Great Retail Store can send a notice to all businesses in Betty's area.
B)The Great Retail Store should place a classified advertisement notice in a newspaper of general circulation.
C)The Great Retail Store should send an actual notice to parties Betty has done credit business with and place an advertised notice in a newspaper of general circulation to the rest of the public.
D)The Great Retail Store is not required to provide a notice to anyone.

Question 32

The Uniform Electronic Transactions Act (UETA):

A)is a physical alteration of network components.
B)is an establishment of the nature of an electronic agent.
C)bans electronic agents for business transactions.
D)legitimizes the use of electronic agents.

Question 33

A(n)________ is an exception to the rule that says that either the principal or the agent may terminate an agency relationship at any time.

A)agency by estoppel
B)agency by mutual agreement
C)agency coupled with an interest
D)notice of reimbursement

Question 34

Greta,an agent,receives money from clients of Wayne,her principal,on the fifteenth of each month.In the absence of an agreement,how frequently must Greta account to Wayne for the money she receives?

A)Typically during the financial year end
B)Immediately upon receiving the money
C)Within a year of receiving the money
D)Within a reasonable period of time after the money is received

Question 35

Carlos instructs his sales agent,Edgar,not to sell on credit to Andrew because Carlos has experienced problems collecting from Andrew for prior purchases.Edgar sells on credit to Andrew,who pays properly.Has Edgar violated any obligation to Carlos?

A)No,Edgar has not violated any obligation since Andrew paid properly.
B)Yes,Edgar has violated the duty to exercise reasonable judgment.
C)No,Edgar has not violated any obligation,since Edgar did not evaluate Andrew's credit worthiness correctly.
D)Yes,Edgar has violated the duty to obey all instructions of the principal.

Question 36

Thomas is named "office manager" by Bigger Co. ,but his precise duties are not described.What type of authority would authorize Thomas to purchase office supplies?

A)Express authority
B)Implied authority
C)Apparent authority
D)Operation of law authority

Question 37

Morgan,an agent,was instructed to sell Drew's property at a specified "firm" price of $450,000.A month later,the value of the property decreased substantially to $75,000 because of zoning changes.What is the status of the agency relationship?

A)Most likely,the agency is terminated because of impossibility.
B)It would terminate unless Drew had given Morgan a durable power of attorney.
C)It becomes an agency coupled with an interest,and continues unaffected by any change what so ever.
D)It requires the agent to compensate the principal with less compensation.

Question 38

Henry owns a movie production house which is represented by a BigLaw Firm.He also owns a shipping agency which is represented by Chase Bank.The agency relationships will be terminated by the bankruptcy of which of the parties?

A)The bankruptcy of Henry will terminate the agency relationship.
B)The bankruptcy of the law firm will terminate the agency relationship.
C)Both Henry and Chase must be bankrupt to terminate the agency.
D)The bankruptcy of the movie production house will terminate the agency relationship.

Question 39

Charlena,a shelf-stocker,offers Megan the post of Vice-President of Procurement to express appreciation for Megan's hard work in stocking the shelves at Charlena's store,Thrift City.Megan creates business cards with her new title on them and uses one to purchase a new truck in Thrift City's name from Highway Auto.Which of these types of authority,if any,has Charlena given Megan?

A)Express authority
B)Operation of law authority
C)Apparent authority
D)Charlena has likely given Megan no authority

Question 40

An agent's duty of loyalty means she likely cannot act for:

A)more than one principal.
B)two principals in the same transaction.
C)more than one year for the same principal.
D)an undisclosed principal.

Question 41

Jackson is a car purchasing agent for Highway Motors,a used car dealer.Jackson attends wholesale auto auctions and notices that some autos have consistently greater demand and higher prices.Jackson forms a car purchasing partnership with Viva Inc.to buy these cars from "for sale by owner" advertisements and then sell them in Viva's name at the auto auctions where Jackson purchases them for Highway.Discuss if Jackson has violated any duty he owes Highway Motors.

Question 42

Xavier hired Sam to sell Xavier's private Lear jet.Before any sale could be made,the jet was destroyed in a crash.The destruction of the jet terminated the agency by operation of law.Whom must Xavier inform of the termination?

Question 43

Allison is an attorney representing Big Co.in trademark litigation.Allison fails to conduct market research in advance of the trial to determine the extent to which consumers identify with the trademark associated with Big Co.Big Co.loses the litigation under a finding that the trademark is generic and not uniquely associated with it.Has Allison violated any duty she owed Big Co.? Discuss.

Question 44

Nolan worked as delivery person for the Super Soap Suds Company.In this capacity,he would frequently collect money from customers for Super Soap Suds.One week,he carelessly allowed his son to deposit the money on his behalf.His son deposited the money in Nolan's personal account.When Nolan tried to retrieve the money,he did not know how much belonged to Super Soap Suds.What legal remedy does Super Soap Suds have against Nolan? Explain.

Question 45

Tom is a real estate agent for Great Housing Co. ,which plans to purchase and build on a plot of land near Leadville.Tom learns that the building site may have been polluted with lead,but does not inform Great Housing Co.Great Housing Co.purchases the land and discovers the pollution when construction starts.Great Housing Co.asserts that it did not know of the lead pollution and should not be required to pay the clean-up cost.Discuss Great Housing's assertion.

Question 46

Cassey is an agent of Green Motors and sells and delivers antique cars.Cassey spends her own money to ship a car from Ohio to Florida.There is no express agreement between Cassey and Green concerning expenses.Discuss the legal rules that apply to this situation.

Question 47

Cars and Cars sells rebuilt parts to repair shops.Allan is Cars and Cars' agent in Smallville.He is paid a commission,but also has a quota to meet.Cars and Cars appoints a second agent,Amanda,in Smallville.This makes it difficult for Allan to meet his quota and also reduces his commissions.Discuss if Cars and Cars has violated any duty it owes Allan.

Question 48

Grandpa has a stroke and becomes mentally incapacitated.Discuss the legal status of any agency relationships that he may have granted and how Grandpa should have planned in advance for this possibility.

Question 49

Tom,owner of the Rico Apartment Complex,appoints Alice as "General Manager" of the Rico Apartment Complex.Alice enters into several contracts in Tom's name: (1)maintenance agreement with Alpha Enterprises; (2)purchase of cable TV service from Star Ethics for Rico;
(3)purchase of a new Corvette for Alice to drive while on Rico business.Discuss which of these contracts bind Tom?

Question 50

Simon sells illegal drugs for JY Laboratories with the understanding that JY Laboratories will receive fifty percent of the gross profits.JY Laboratories fails to honor this agreement.Discuss whether Simon may sue JY Laboratories to enforce the agreement.