Deck 36: Third-Party Relations of the Principal and the Agent

Question 1

A principal is liable on a contract made by his agent if the agent had actual authority to make the contract.

Answer 1

True
Explanation: The principal in an agency relationship is liable on a contract made by the agent if the agent had actual or apparent authority to make the contract.

Question 2

Estoppel is the concept that a principal may be liable to a third party if that party justifiably believed that the agent had authority to act for the principal and there was a detrimental change in the third party's position.

Answer 2

True
Explanation: Estoppel is when a person may be liable for an actor's transaction with a third party who justifiably is induced into detrimental change because he believed the actor had authority to act for the person.

Question 3

It is always necessary for an agent to disclose the identity of the principal to any third person with whom he is contracting;otherwise the contract becomes void.

Answer 3

False
Explanation: When the contract or other act occurred,the agent must have indicated to the third party that she was acting for a principal and not for herself.The agent need not,however,have disclosed the principal's identity.

Question 4

Ratification is a process whereby a principal binds himself to an unauthorized act done by an agent,or by a person purporting to act as an agent.

Question 5

An agent who has total control over a piece of property has implied authority to contract for repairs.

Question 6

The principal's ratification of a contract can be implied from his conduct,even if the principal says nothing to ratify.

Question 7

A principal is liable for the misrepresentations made by an agent during a transaction with a third party.

Question 8

Direct liability is also known as respondeat superior liability.

Question 9

Express authority is usually created by detailed language.

Question 10

Apparent authority protects third parties who reasonably rely on the principal's manifestations that the agent has authority.

Question 11

Respondeat superior makes a principal liable for an employee's negligence but not for her intentional torts.

Question 12

In some cases,both principal and agent may be liable for an agent's torts.

Question 13

To be within the scope of employment,the agent's conduct must have been completely motivated by the desire to serve his employer.

Question 14

An agent who purports to act for a legally nonexistent principal is personally liable when the agent knows or has reason to know the principal does not exist.

Question 15

If an agent has authorized his subagent to make a certain contract and this authorization is within the authority granted to the agent by his principal,the principal is bound to the subagent's contract.

Question 16

A principal can ratify an agent's unauthorized contract even if the third party withdrew from the contract prior to ratification.

Question 17

An agent's implied authority is always considered superior in law,and thus can contradict principal's express statements.

Question 18

As a general rule,a principal is not liable for torts committed by independent contractors while performing the principal's business.

Question 19

Exculpatory clauses that try to relieve a principal of liability for an agent's misrepresentations usually insulate the principal from tort liability and prevent the third party from rescinding the contract.

Question 20

Respondeat superior liability depends on whether the principal himself was at fault.

Question 21

Tara,an agent,enters into a contract on behalf of Sue to buy 100 pencils for $1 each and 100 pens for $2 each.Sue determines that Tara got a good price for pencils but made a poor deal on pens.Sue indicates she wishes to ratify only the agreement to buy pencils.Has Sue acted properly?

A)Yes,because Sue is free to ratify or not ratify any part of the contract.
B)Yes,but only if Tara had legal capacity at the time of contracting
C)No,because a principal must ratify an entire contract,not just the favorable parts.
D)No,unless Tara had express authority to bind Sara to both contract terms.

Question 22

Which of the following determines an agent's actual authority?

A)The agent's reasonable understanding of the principals' manifestations and objectives.
B)The actions the agent must take that are necessary and incidental to achieving the principal's objectives.
C)The authority implied by the conduct of the principal
D)The authority third parties believe the agent has based on the agent's conduct.

Question 23

Borg is the vice-president of purchasing for Crater Corp.He has authority to enter into purchase contracts on behalf of Crater provided that the price under a contract does not exceed $2 million.Dent,who is the president of Crater,is required to approve any contract that exceeds $2 million.Borg entered into a $2.5 million purchase contract with Shady Corp.without Dent's approval.Shady was unaware that Borg exceeded his authority.Neither party substantially changed its position in reliance on the contract.What is the most likely result of this transaction?

A)Crater will be bound because of Borg's apparent authority.
B)Crater will not be bound because Borg exceeded his authority.
C)Crater will only be bound up to $2 million,the amount of Borg's authority.
D)Crater will be bound because of Borg's actual authority.

Question 24

The process by which a principal binds himself to an unauthorized act done by an agent,or by a person purporting to act as an agent,is called ________.

A)indemnification
B)notification
C)liability
D)ratification

Question 25

Express authority is created by:

A)words.
B)actions.
C)past dealings.
D)body language.

Question 26

Anna hired Juan to act as her sales agent in her auto dealership.However,Anna has instructed Juan not to enter into any sales contracts before she has had a chance to review the transaction.One day,Juan entered into a sales contract with William without informing Anna first.Has Juan created a contract with William that is binding on Anna in this situation?

A)Yes,Juan had actual authority to act.
B)Yes,Juan had express authority to act.
C)Yes,Juan had implied authority to act.
D)Yes,Juan had apparent authority to act.

Question 27

Susan is hired to manage a business.Because she has been hired as a manager,she has the authority to make contracts that are reasonably necessary for conducting the business.This is called:

A)express authority.
B)apparent authority.
C)implied authority.
D)fixed authority.

Question 28

Ordinarily,an agent is not liable for unauthorized acts made on behalf of a principal if:

A)the third party has no knowledge about the principal's identity.
B)the third party knows that the principal lacks legal capacity.
C)the principal eventually ratifies the contract.
D)the principal is undisclosed.

Question 29

________ arises when the principal's manifestations cause a third party to form a reasonable belief that the agent is authorized to act in a certain way.

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

Question 30

Ralph,the owner of a medium-sized business operated as a sole proprietorship,gives his vice-president,Wanda,authority to hire a new manager for the firm.Ralph gives Wanda detailed instructions about the salary she can contract to pay,but tells her that under no circumstances can she make commitments regarding the new manager's pension.Wanda contracts to hire Nick for the new managerial position.But to get Nick to sign up,she has to make certain specific pension commitments to him.Some years later,Nick sues Ralph for failing to fulfill the pension commitments.Which of the following is true in this case?

A)Ralph has no liability,because he expressly told Wanda that she didn't have authority to bind him on pension matters.
B)Ralph is bound on the basis of Wanda's apparent authority.
C)Ralph is bound on the basis of Wanda's implied authority.
D)Ralph is bound on the basis of Wanda's actual authority.

Question 31

Implied ratification arises when:

A)the principal's conduct justifies a reasonable assumption that he consents to the agent's act.
B)the principal manifests assent that his legal relations be affected.
C)the third party withdraws from the contract before the principal manifests assent.
D)the principal binds himself to an unauthorized or illegal act done by an agent.

Question 32

________ occurs when a principal manifests assent that his legal relations be affected,such as stating orally that he wishes to be bound by a contract that has already been made.

A)Express ratification
B)Unauthorized ratification
C)Implied ratification
D)Valid ratification

Question 33

How does agency law stimulate business activity?

A)By binding principals to contracts to create certainty
B)By holding principals accountable for agent actions,protecting consumers
C)By letting principals contract through agents,multiplying their dealings
D)By restricting the liability of principal's for the actions of agents

Question 34

What are the two types of authority an agent can have to make the principal liable on a contract made by the agent?

A)Actual and apparent authority
B)Actual and ratification authority
C)Apparent and ratification authority
D)Ratification and estoppel authority

Question 35

What happens if a third-party gives proper notification to an agent with apparent authority to receive it?

A)The principal is bound only if the agent had express authority to receive notification.
B)The principal is bound based on the doctrine of third party estoppel.
C)The principal is bound as if the notification had been given directly to him.
D)The principal is not bound unless it is proven the agent transmitted the notification.

Question 36

Which of the following is true of implied authority?

A)It can contradict a principal's express statements.
B)It exists even when the principal has limited the agent's authority through clear instructions.
C)It is usually derived from a grant of express authority by the principal.
D)It exists only if there is a relevant grant of express authority.

Question 37

What are the two types of ratification?

A)Express and implied ratification
B)Express and actual ratification
C)Estoppel and express ratification
D)Estoppel and implied ratification

Question 38

________ means that the principal's rights and liabilities are what they would have been if the principal had known what the agent knew.

A)Notification
B)Authorization
C)Ratification
D)Imputation

Question 39

________ is the authority the principal wants the agent to possess and is based on the principal's communications or manifestations to the agent.

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

Question 40

Maria authorizes Frederick to sell her Maria-branded tee-shirts for $20 or more.Frederick sells the tee-shirts for $25 each.What type of authority gives Frederick authority to sell the tee-shirts?

A)Express authority
B)Implied authority
C)Estoppel
D)Ratification

Question 41

Which of the following is true regarding the requirements of ratification?

A)An agent's illegal contract cannot be made binding by the principal's subsequent ratification.
B)An agent should disclose the principal's identity when entering into a contract with a third party.
C)A principal without legal capacity can ratify the unauthorized acts of the agent.
D)An agent's beneficial acts can be ratified by the principal while the detrimental ones can be rejected.

Question 42

Hillary tells Iris that she wants to buy Iris's house "on behalf of a party who wishes her identity not to be known." The party is Baker Associates.With Baker's consent,Hillary contracts with Iris on Baker's behalf to buy the house.What is Hillary's liability on this contract?

A)Hillary is liable because Baker is an undisclosed principal.
B)Hillary is liable because Baker is an unidentified principal.
C)Hillary can be liable only if she expressly agreed to be liable.
D)Hillary is liable because Baker is a legally non-existent principal.

Question 43

The doctrine of respondeat superior means:

A)"let the buyer be aware."
B)"you may have the body."
C)"of private right."
D)"let the master answer."

Question 44

If a subagent contracts with a third party in an authorized transaction then who is liable by the subagent's actions?

A)The local district attorney
B)The agent
C)The third party
D)No one

Question 45

Why is estoppel different from apparent authority?

A)Because estoppel does not require the purported principal has made any manifestation that the purported agent can act for her.
B)Because estoppel does require the purported principal to make manifestations that the purported agent can act for her.
C)Because apparent authority does not require the purported principal has made any manifestation that the purported agent can act for her.
D)Estoppel is the same as apparent authority.

Question 46

Marcus is an agent for Leo and Marcus is authorized to buy a car for Leo.Marcus discloses to all car dealers that he is acting on Leo's behalf to buy the car.Leo is a(n)________.

A)Authorized principal
B)Express principal
C)Implied principal
D)Disclosed principal

Question 47

Corine engaged Datz as her agent.It was mutually agreed that Datz would not disclose that he was acting as Corine's agent.Instead he was to deal with prospective customers as if he were a principal acting on his own behalf.In accordance with this agreement,he made several contracts for Corine.If a third party filed a lawsuit on one of the contracts,which of the following statements would be true?

A)Corine is disallowed from ratifying Datz's contracts in order to transfer liability.
B)Datz has no liability once he discloses that Corine is the real principal.
C)The third party can hold only Datz liable since the third party believed that Datz was the principal.
D)The third party may choose to hold either Datz or Corine liable.

Question 48

Penny,acting as an agent for Felipe,enters into a contract with Tanya,but Tanya knows that Penny does not have authority to enter into contracts on Felipe's behalf.Is Penny liable for making an unauthorized contract?

A)No,because Penny lacks implied authority to enter into the contract.
B)No,because the third party knows the agent lacks authority.
C)No,because the agent lacks express authority to enter into the contract.
D)Yes,because Penny entered into the contract while acting as an agent.

Question 49

Maco Corp.is a real estate development firm and regularly engages real estate brokers to act on its behalf in acquiring parcels of land.The brokers are authorized to enter into such contracts,but are instructed to do so in their own names without disclosing Maco's identity or Maco's relationship to the transaction.If a broker enters into a contract with a seller on Maco's behalf:

A)Maco will be bound by the contract because of the broker's apparent authority.
B)the broker will not be personally bound by the contract because the broker has express authority to act.
C)Maco will not be liable for the intentional torts of the broker committed while acting on Maco's behalf.
D)the broker will be held liable on contracts he/she signs without disclosing Maco as the principal.

Question 50

A principal is ________ if a third party knows or has a reason to know that the agent is acting for a principal and the principal's identity.

A)formalized
B)nonexistent
C)disclosed
D)undisclosed

Question 51

When does an agent expressly bind herself to a contract made for a principal?

A)When the agent acts as a surety
B)When the doctrine of estoppel applies
C)When the agent contracts for a principal while lacking authority to do so
D)An agent cannot bind herself to a contract made for a principal

Question 52

In which of the following cases is the agent,but not the principal,liable?

A)An agent with no authority contracts for a disclosed principal.
B)An agent with actual authority contracts for an unidentified principal.
C)An agent with apparent authority contracts for an unidentified principal.
D)An agent with apparent authority contracts for a disclosed principal.

Question 53

When does an agent expressly bind herself to a contract made for a principal?

A)When the agent acts as a surety
B)When the doctrine of estoppel applies
C)When the agent contracts for a principal while lacking authority to do so
D)An agent cannot bind herself to a contract made for a principal

Question 54

Cyrano hired Roxanne to purchase a yacht.Cyrano did not want sellers to know that he was the buyer because he was very rich and he thought that sellers would demand a higher price if they were aware of this.So he instructed Roxanne to inform the sellers that she was acting for an anonymous buyer.Roxanne did not disclose that she was acting on behalf of a principal,and she entered into a contract to purchase a yacht from Richard.However,Cyrano did not like the yacht that Roxanne selected and refused to pay the purchase price.Richard insisted that Roxanne herself pay the purchase price.If Richard sues Roxanne to enforce the contract against her,what will be the outcome?

A)Richard will win because Roxanne did not disclose her principal's identity.
B)Richard will win because Roxanne did disclose that she was acting as an agent,and not for herself.
C)Richard will lose because Roxanne did disclose that she was acting as an agent,and not for herself.
D)Richard will lose because Roxanne was acting as an agent with actual express authority.

Question 55

Respondeat superior makes a principal liable for which of the following?

A)An employee's negligence only.
B)An employee's intentional torts only.
C)Both an employee's negligence and an employee's intentional torts
D)Neither an employee's negligence nor an employee's intentional torts.

Question 56

When a principal is liable for an agent's actions to a third party because the third party detrimentally changed his position based on a reasonable belief that the agent was acting with the authority of the principal,what is this called?

A)Estoppel
B)Undisclosed
C)Ratification
D)Incorporation

Question 57

Dart Corp.dismissed Ritz as its general sales agent and hired Parker as its new general sales agent.Parker provided notice to Bing Corp. ,a retail outlet,that he was taking over as general sales agent and Bing was no longer authorized to make sales for Dart Corp.Ritz subsequently sold Bing Corp.goods to be delivered by Dart Corp.and accepted a standard 20 percent cash deposit for the sale of goods,which is common in the industry.  In an action by Bing against Dart on the sales contract,which of the following is true?

A)Bing will win the lawsuit because Dart's notice was inadequate to terminate Ritz's apparent authority.
B)Dart will win the lawsuit because Dart's new agent provided notice to Bing that Ritz is no longer Dart's agent.
C)Bing will lose the lawsuit,because Ritz lacked any express or implied authority to make the contract.
D)Bing will lose the lawsuit because Bing was negligent while making a contract with Ritz.

Question 58

What is the nature of the principal if a third party knows that the agent is acting for the principal and also is aware of the principal's identity?

A)Unidentified
B)Nonexistent
C)Disclosed
D)Undisclosed

Question 59

An agent is not liable for making an unauthorized contract if:

A)the third party does not know that the agent lacks authority.
B)the principal fails to subsequently ratify the contract.
C)the agent does not notify the third party that he does not warrant his authority to contract.
D)the third party actually knows that the agent lacks authority.

Question 60

Kin is an agent for a disclosed principal,Tracy.Kin contracts with Phil on Tracy's behalf.Kin becomes liable to Phil when:

A)he signs the contract "Kin,by Tracy."
B)he signs the contract "Kin,on behalf of Tracy."
C)he signs the contract "Kin,agent."
D)he signs the contract "Kin,for Tracy."

Question 61

What is a nondelegable duty?

A)A duty of care so important a principal cannot avoid liability by delegating it to an agent.
B)A duty of care a principal can delegate only by express authority.
C)A duty of care a principal can delegate only by implied authority.
D)A duty of care a principal must perform directly and cannot delegate to an agent.

Question 62

What is an employer's liability based on under respondeat superior?

A)The employer's relationship with the employee
B)The employee's own fault.
C)The employee's apparent authority to act on the employer's behalf
D)The doctrines of ratification and estoppel.

Question 63

Ordinarily a principal is not made liable for any of the torts committed by:

A)a reckless employee.
B)an employee.
C)an agent.
D)an independent contractor.

Question 64

Lee,a landlord,hires Shomo,a repairman,to fix a broken staircase in the house occupied by his tenants,the Grants.However,Mrs.Grant has an accident while climbing down the stairs and injures herself severely.It was found that Shomo had not fixed the staircase properly,which caused this accident.Which of the following is true of this situation?

A)The Grants can file a lawsuit against Shomo,since Shomo was an agent and did not perform his duties properly.
B)Lee will be held liable under the doctrine of respondeat superior for the non-performance of Shomo.
C)The Grants can hold Lee directly liable for Shomo's tortious behavior,since Shomo was Lee's employee.
D)Lee will be held directly liable for Shomo's failure to perform,since Shomo was Lee's nonemployee agent.

Question 65

Percy is a bus driver but he cannot make his route so he asks Samuel to take his route on for the day as an independent contractor.Samuel drives unsafely and injures a bus passenger.Is Percy liable?.

A)No,because Samuel was an independent contractor.
B)No,because Samuel was a non-employee agent.
C)Yes,because Percy had a nondelegable duty of care.
D)Yes,because Samuel had implied authority to drive the bus.

Question 66

Maple hired Birch to work as her taxi driver.After a long,hot summer day of city driving and dealing with other rude drivers,Max,another driver,cut Birch off and slightly dented Birch's taxicab.An enraged Birch pulled Max out of the car and hit him with a brick that was lying on the road.Max suffered serious and permanent injuries and wants to sue.Who is liable in this situation?

A)Maple,under the doctrine of direct liability.
B)Birch,since he was not in scope of employment.
C)Maple and Birch,since the principal and the agent are responsible for the agent's torts.
D)Max instigated the incident and hence will not be successful in the lawsuit.

Question 67

Abel was employed as a security guard for Seep Corporation.Abel's job was to guard a fenced-in area and to use force to keep intruders from climbing the fence to enter the plant.His working hours were from 8:00 A.M.to 5:00 P.M.At about 11:00 P.M.one evening,Abel drove past his place of employment.He saw a teenager named Johnny climbing the outside of the fence that he guarded during the day.Angered by this violation of Seep's property rights and by the fact that Johnny had called him a "potbellied moron" only three days earlier,Abel stopped his car,ran up to the fence,pulled Johnny off of it,and beat him up.Johnny sues Seep Corporation for Abel's assault and battery (both intentional torts).Which of the following is most likely to be the court's verdict?

A)Seep's is directly liable because Abel was an employee of the corporation at the time of the incident.
B)Seep's is not liable because Abel didn't act within the scope of his employment.
C)Seep's is liable under the doctrine of respondeat superior,since Abel was an employee.
D)Seep's is not liable for the intentional torts committed by its employees.

Question 68

When does a scope of employment requirement exist?

A)When a principal is directly liable for an agent's torts.
B)When a principal is liable for an agent's torts because of implied authority.
C)When a principal is liable for an agent's torts because of express authority.
D)When a principal is liable for an agent's torts under respondeat superior.

Question 69

Stan hired Mason to work as a janitor in Stan's apartment building.Mason was negligent.He left the floor in the building lobby wet and slippery without putting up a warning sign.Martha slipped and fell on the wet floor.If Stan is liable for this accident,what is the source of his liability?

A)Direct liability
B)Vicarious liability
C)Strict liability
D)Negligent liability

Question 70

Sandra hired Jeff to work as a taxi driver for Sandra.Jeff had a long criminal record for violent assaults,including three cases of vehicular homicide.However,Sandra was not aware of this and she does not check employees' criminal records.While Jeff was driving a passenger,Ben,they got involved in a heated argument.Jeff pulled Ben out of his car and hit him.Which of the following is true of this case?

A)Since Sandra was not aware of Jeff's criminal history,she will not be held liable for this incident.
B)Jeff was outside the scope of his employment,hence he is liable for this tort,and Sandra escapes liability.
C)Sandra is liable for the incident only under the vicarious liability doctrine.
D)Sandra is liable because of the direct liability doctrine.

Question 71

Phillips hires Addis,who had sixteen prior convictions for the use of hallucinogenic drugs,as an air traffic controller for his private airport.Phillips could easily have discovered the convictions had he made a routine criminal record check,but that was too much trouble.Phillips knew nothing whatsoever about the job of an air traffic controller,and,when he hired Addis,merely told him to "get the planes in safely the best way you know how;the details are up to you." One day,Phillips held a private birthday party for a celebrity and invited 20 of his rich and famous friends,all of whom were to arrive by a private jet.As it turned out,Addis was under the influence of drugs on this day and,as a result,all 20 of Phillips's friends were killed.After this national tragedy,Phillips and Addis were sued for negligence by the estates of the victims.In this case:

A)Phillips is directly liable for negligent hiring.
B)Phillips is liable only under the doctrine of respondeat superior.
C)Phillips is not liable because Addis is an independent contractor.
D)Phillips is not liable because he could never have foreseen Addis' negligence.

Question 72

When is a principal directly liable for tortious behavior connected with the retention of a nonemployee agent?

A)When the principal hires a dangerously incompetent nonemployee agent.
B)When third parties believe the nonemployee agent has apparent authority.
C)When third parties believe the nonemployee agent has express authority.
D)Never

Question 73

If an agent has,within the scope of the agency relationship,committed both negligent and intentional acts resulting in injury to third parties,the principal:

A)may be liable for both the negligent and intentional acts.
B)may effectively limit his or her liability to those third parties if the agent has signed a disclaimer absolving the principal from liability.
C)will be liable under the doctrine of respondeat superior only for the intentional acts of the agent.
D)will never be liable unless he or she actively participated in the acts.

Question 74

The state of Indiana hires the Reliable Construction Company to do some excavation work on an interstate highway.The state lays out the general objectives that Reliable has to achieve,but the details of the job are up to Reliable.The job involves digging holes ten feet deep,the whole way,across the highway.Given the nature of the job,it's important that Reliable be especially careful in putting up flashers and warning signs to steer oncoming motorists onto a detour.Reliable,however,does not do an adequate job in this regard and motorists are continually driving their cars into the construction area at high speed.One of these drivers,Tim,is unable to stop in time,and drives his car into the hole,suffering severe personal injury and damage to his car.Tim sues Reliable and the state for Reliable's negligence.In this case:

A)the state is liable under the doctrine of respondeat superior.
B)the state is not liable because Reliable is an independent contractor.
C)the state is liable for Reliable's failure to take requisite special precautions.
D)the state is not liable because it was not negligent.

Question 75

A(n)________ case involves harm caused by the principal's negligence regarding the agent.

A)respondeat superior
B)direct liability
C)vicarious liability
D)implied warranty

Question 76

Nina hired Sue to work as a janitor in Nina's apartment building.Sue was negligent in that she left a crack in the marble staircase unrepaired,without putting up a warning sign.Seth slipped on the staircase and suffered severe injuries.Who is liable for this accident?

A)Nina is liable for the accident under the doctrine of respondeat superior.
B)Sue is liable for the accident since she did not perform her duty with reasonable care.
C)Sue will be held liable for committing an intentional tort out of her scope of employment.
D)Nina will be directly liable for Sue's negligence.

Question 77

When is a principal directly liable for misrepresentations made by an agent?

A)During all authorized transactions
B)During authorized transactions if the principal intended the agent make the misrepresentations
C)During authorized transactions if the principal ratified the misrepresentations
D)Never

Question 78

A principal will not be liable to a third party for a tort committed by an agent:

A)unless the principal was legally nonexistent.
B)unless the tort was committed within the scope of the agency relationship.
C)if the agency agreement limits the principal's liability for the agent's tort.
D)if the tort is also regarded as a criminal act.

Question 79

Principals may try to escape liability for an agent's misrepresentations by including ________.

A)defensive conditions
B)exculpatory clauses
C)torts
D)ratification clauses

Question 80

Andy works for Sparkles,a jewelry store.While selling a zircon-studded ring to a customer,Andy falsely states that the zircon is a diamond.The customer,delighted to find a diamond ring at an affordable cost,buys the ring.If the customer files a lawsuit for damages,which of the following will most likely be the court's verdict?

A)Andy had the actual and apparent authority from Sparkles to make true statements,hence Sparkles is liable for Andy's misrepresentations.
B)Andy will be held liable for the misrepresentation and will have to pay damages to the customer and to Sparkles.
C)The customer will be held responsible since he was negligent in the purchase,but may receive a small percentage of damages from Sparkles.
D)Andy will be held liable for the misrepresentation to the customer,and will have to pay him damages.