Deck 10: Agency and Employment Relationships

Question 1

Craig has been hired by Brian to negotiate a deal with Rudy.Brian instructs Craig that while in Rudy's office,should he be able to steal the Johnson file he is to do so.If Craig has the opportunity to steal the file but fails to do so,he is in violation of his duty of obedience and to follow his principal's instructions.

Answer 1

False
Explanation: An agent is obligated to follow lawful instructions and is not required to follow illegal ones.

Question 2

Robin is an employee-at-will and works from 8 am until 6:30 pm Monday through Thursday.She gets ½ hour for lunch.It is a presidential election day and she goes to the polls at lunch where she discovers a one hour line.She calls her employer who tells her she has to be back within the ½ hour.She is told that the polls close at 6 pm so she stays because she really wants to vote.When she returns to work late she is fired.The employer may do so under the employment-at-will doctrine.

Answer 2

False
Explanation: Voting is a constitutional right and termination for exercising a statutory or constitutional right and being fired for doing so results in a wrongful termination.

Question 3

An agent is generally prohibited from using their own judgment in substitution of the principal's judgment unless specifically authorized by the principal.

Answer 3

True
Explanation: Obedience requires the following of instructions and agents may not substitute their own judgment for that of their principal unless so authorized.

Question 4

A revocation of the agency relationship requires the principal and the agent to agree to terminate the agency.

Question 5

If Sam is hired by a pest company to go into people's homes and six months after starting it is discovered that Sam has previously been arrested and found guilty of criminal assault.Failure to fire or reassign Sam to a nonpublic related position may give rise to a suit based on ________ should Sam attack a customer in their home while in the course of employment.

Question 6

If an agent possesses important facts directly related to his agency relationship but withholds those facts from the principal,the agent has breached her duty of ______.

Question 7

Agents who act on behalf of a principal without receiving any compensation are called ________ agents.

Question 8

Liability involving one party's liability for another party's act is called ________ liability.

Question 9

An independent contractor is not considered an employee but is entitled to minimum wage and overtime protections.

Question 10

Vince is a general contractor who hires Brad to install plumbing in a government building under construction.The morning that Brad is to begin work,Vince discovers that Brad has lost his plumbing license and is no longer eligible to do work on government buildings.When Brad shows up ready to work,Vince informs him that he can't use his services and sends him away.The agency relationship terminated due to operation of law.

Question 11

Clyde has been hired to deliver a truckload of hogs to a cross state slaughter house.On the way there he stops to visit his girlfriend Samantha who lives five minutes off of his prescribed route.He spends five minutes with her.During those five minutes he is considered to be on a ______.

Question 12

The centerpiece of a fiduciary relationship is the agent's duty to act with due care when performing the responsibilities of the agency.

Question 13

Tom has been injured on the job so Dick hires Harry to fill in for him.The agreement with Harry is that he will work until Tom is ready to return.When Tom is indeed ready to return,Dick's position is terminated by an express act defined as ______.

Question 14

Expressly firing someone for whistle-blowing constitutes the act of ______.

Question 15

Each state follows its own individual whistle-blower statute.

Question 16

Implied contracts may be found through language contained in an employee handbook or manual.

Question 17

An employee who reports unlawful conduct or a statutory violation committed by their employer is called a ______.

Question 18

Authority based on what the third party reasonably believes the agent to possess is called ______ authority.

Question 19

Acceptance of an agent's previously unauthorized act by a principal is called ______.

Question 20

An express termination of the agency relationship by the agent is called a renunciation.

Question 21

The Restatement (Third)of Agency has been adopted in about half of the states.

Question 22

Whether someone is an agent or not depends on what is said in the agreement between the principal and the agent.

Question 23

Courts will apply a subjective standard when examining the existence of offer and acceptance by the parties when creating an agency relationship.

Question 24

Jethro is having a sweet sixteen birthday party for his daughter Kate in his backyard.To make the party special,he hires Tony to put on a fireworks display.He found Tony in a classified ad in the local newspaper.In the written contract,Jethro simply instructs Tony to begin the display at 8:00 pm,make it last 16 minutes and to make it spectacular but no safety parameters are mentioned or discussed.During the finale,one of the rockets malfunctions and explodes amidst the party guests,injuring 8 people.Jethro has no liability because Tony was an independent contractor.

Question 25

A principal has the power to terminate an agency relationship whether or not they have the legal right to terminate that relationship.

Question 26

If an agent is acting within the scope of her employment,should she commit an intentional tort harming a third party the principal may be liable for the injuries sustained.

Question 27

The doctrine of negligent hiring only applies to independent contractors when the contractor is hired to do a hazardous or inherently dangerous job.

Question 28

The manager at an apartment complex has no prior criminal record but has just been arrested for possession of child pornography.If he is convicted but given probation and not jailed,the apartment complex may be liable if they do not fire him and he later harms a child on the premises.

Question 29

An agent may work for two principals at the same time if the agent deals fairly with both.

Question 30

Generally,regarding employment at-will,employees may be fired just because the boss doesn't like them.

Question 31

Rob agrees to act as an agent for Diane in selling her car.Diane has a duty of loyalty to Rob.

Question 32

In an agency relationship the principal's control must be total and continuous over the agent.

Question 33

In a disclosed agency situation,the agent is not contractually liable to the third party.

Question 34

Your professor is a partially disclosed agent representing your school.

Question 35

Actual authority is the authority that the third party may reasonably assume that the agent possesses.

Question 36

Gina has hired Frank,an attorney,to handle her divorce.If during face to face negotiations,Frank strikes Gina's husband's attorney,Gina will be liable because Frank was her agent employee.

Question 37

One of the principal's duties is to keep an accounting during the agency relationship.

Question 38

One significant benefit of an employer completing an IRS Form SS-8 is that even if the employer does in fact misclassify a worker,the proper completion of the form may evidence a good faith effort by the employer reducing or even eliminating IRS penalties for misclassification.

Question 39

Whether an agency is classified as disclosed,undisclosed or partially disclosed,the principal has the duty to fully perform the contract obligations.

Question 40

If an agent suffers losses while acting for the principal,the principal has a duty to indemnify the agent for those losses.

Question 41

Jack is a truck driver employee of Ace Trucking.While delivering his cargo he sees that the truck assigned to him is low on gas.Jack pulls into a convenient station and puts $50 worth of gas in which will allow him to complete his assignment and return to the depot.

A) Ace is not required to reimburse Jack unless he had been given the express actual authority to purchase gas on behalf of the principal prior to starting the delivery
B) Ace is not required to reimburse Jack unless he phoned in and asked for and was granted permission to purchase gas
C) Ace will be required to reimburse Jack for the cost of the gas based on implied authority stemming from his express authority to drive the truck
D) Ace will be required to reimburse Jack because apparent authority gives him the right to buy gas when it is apparent that it is needed

Question 42

Karl is a driver for Arnold's Appliance Store and delivers appliances to customers.One day,Karl negligently secures a washer and dryer in the back of his truck and while driving,the washer falls out of the truck.Jan,driving behind the truck,sees the appliance flying at her and swerves into a telephone pole.Which of the following is correct?

A) Karl, but not Arnold's is liable
B) Both Karl and Arnold's are liable
C) Arnold's, but not Karl is liable
D) no one is liable, it was an accident

Question 43

Joyce contracted with Mega Drug Corporation to buy vitamins on behalf of Howard,a personal trainer.Howard told Joyce to use her own name and not to disclose to Mega that she was working for Howard.If Joyce signs the contract in her own name only and Howard won't honor it:

A) Joyce can't be sued because she's only an agent.
B) Joyce is liable but may sue Howard based on indemnification.
C) Joyce is liable but may sue Howard based on failure of loyalty.
D) Howard has no liability to anyone since his name was never disclosed

Question 44

Young has just fired Kathy who was her agent.Young places an ad in the classified section of the various local newspapers stating that "Kathy no longer works for or represents Young in any way".Young would place this ad:

A) to eliminate any possible liability resulting from actual authority.
B) to eliminate any possible liability resulting from apparent authority.
C) to eliminate any possible liability resulting from ratification.
D) to eliminate any possible liability resulting from respondeat superior

Question 45

Sanchez borrowed money from Fifth National Bank to buy a car.She defaulted on the loan.Fifth National hired Rex's Recovery Service to repossess the car for a set fee.They were simply told to locate and seize the car.Rex's would be classified as a/an:

A) agent/employee.
B) principal.
C) gratuitous agent.
D) independent contractor

Question 46

The nonagent employee relationship is sometimes referred too as the:

A) superior/inferior relationship.
B) supervisor/worker relationship.
C) director/directee relationship.
D) master/servant relationship

Question 47

In Hannington v.University of Pennsylvania,the court had to determine whether an attorney acted under apparent authority regarding the negotiation and signing of a settlement agreement.They determined that:

A) attorneys are generally independent contractors and cannot possess apparent authority to bind a principal.
B) after six months of negotiations it is reasonable to believe that an attorney has apparent authority to finalize an agreement on behalf of the principal.
C) because the agency was disclosed and the principal's identity well known, the University could have easily verified the enforceability of the agreement with Hannington so they are at fault for not doing so.
D) third parties may never enforce an agreement that the principal has not authorized and signed

Question 48

If an agent acts in a disloyal manner and realizes a personal profit from their acts,the court may order a return of the funds which is called:

A) replenishment.
B) disgorgement.
C) restoration.
D) reinstatement

Question 49

In which of the following situations is the agent not liable should the principal breach the contract with the third party?

A) agents are liable in all agency situations
B) partially disclosed agency
C) undisclosed agency
D) disclosed agency

Question 50

In Estrada v.Fedex Ground Package System,Inc.,the court determined that the plaintiffs were employees for each of the following reasons except:

A) Fedex exercised extensive control over the driver's schedules.
B) Fedex maintained a standard pay rate for all similarly situated drivers.
C) Fedex required the drivers to work exclusively for the company.
D) Fedex required the drivers to supply and use their own trucks

Question 51

Which of the following is the true statement?

A) ratification applies to previously unauthorized acts
B) actual authority must be expressly created and cannot be based on custom or past dealings
C) apparent authority is based on what the principal communicates to the agent and not the third party
D) actual authority must always be expressed in writing

Question 52

Agency law primarily exists on the:

A) state level.
B) federal level.
C) common law level.
D) constitutional level

Question 53

Mike worked for Frank's Pizza as a driver and is an agent.His duties consisted of making deliveries along a designated route.One day Mike decided to see his girlfriend,Jackie,who lived 50 miles out of his pizza route.While driving to his girlfriend's,Mike injured a pedestrian,Chuck.The accident was caused because of Mike's negligent driving.Chuck is now suing both Mike and Frank's for personal injuries.Under the circumstances:

A) Frank's is liable under the doctrine of respondeat superior.
B) Frank's is never liable for the negligent torts of its agents.
C) Chuck can recover damages from both Frank's and Mike.
D) Frank's is not liable because Mike's was on a frolic of his own

Question 54

Which of the following is a form of vicarious liability?

A) respondeat superior
B) disgorgement
C) repudiation
D) ratification

Question 55

Robert is a wealthy businessman who wishes to purchase a particular property.Realizing that the price might become inflated if his name is made known,he asks Faye to negotiate the purchase of the property on his behalf.Faye is the general manager of Robert's east coast operations.Faye reports directly to Robert and is supervised in all respects.Faye is told to tell Philip,the property owner,that she represents someone but she's told not to specify who she works for.The agency would be described as:

A) partially disclosed.
B) disclosed.
C) undisclosed.
D) indemnified

Question 56

Respondeat superior makes a principal liable for:

A) acts of the agent based on implied authority.
B) unauthorized acts of the third party.
C) frolics and detours of the agent.
D) negligent acts of independent contractors

Question 57

Which of the following is not an exception to the employment-at-will doctrine?

A) the employee is working under an express employment contract
B) the employee is working under an implied employment contract
C) the employee's termination violates a public policy or statutory right
D) the employee is terminated but has received excellent evaluations and the employer cannot articulate a reason for the dismissal

Question 58

Angelina hires Brad to drive a truck to a depot 200 mile away.She specifies the route that he is to take and tells him to be sure to arrive by 5:00 pm.On the way,Brad finds himself nodding off due to hunger.He checks the time and finds that he has plenty of time to make the 5:00 pm deadline so he decides to stop at a diner that he is familiar with.The diner is ¾ of a mile off of the route that Angelina had specified.Brad does not call Angelina to ask for permission.On the way to the diner,Brad runs a light and has a collision with Billy Bob.Billy Bob sues Angelina.

A) Angelina wins because Brad was on a detour, freeing her from liability
B) Angelina wins because Brad was on a frolic, freeing her from liability
C) Angelina loses because Brad was on a detour, so she is liable
D) Angelina loses because Brad was on a frolic, so she is liable

Question 59

A gratuitous agent:

A) has no duty of care owed to the principal.
B) breaches the duty of care when ordinarily negligent.
C) breaches the duty of care when grossly negligent.
D) is held to the same standard of care as any other type of agent other than the independent contractor

Question 60

The Happy Days Day Care is hiring a child care worker.On their application they specifically ask if you've ever been arrested.Tina has applied for a job at Happy Days and answered no to the question.She has also answered no to the question asking if there is any reason that she would not be qualified to work with children.Soon after Tina is hired she severely shakes a baby to stop it from crying causing the baby injuries.It is discovered at trial that Tina has been fired from numerous day cares for baby shaking and other various offenses.If the baby's parents sue Happy Days:

A) Happy Days is not liable because they made a good faith effort to screen applicants because they specifically asked about past indiscretions.
B) Happy Days is liable because Tina was not dealing with the public, only with children.
C) Happy Days is liable for negligent hiring.
D) Happy Days is liable for negligent retention

Question 61

Stella is an agent for Howard.It has come to Howard's attention that Stella has breached the duty of loyalty and has used information that Stella should have passed on to Howard for her own personal dealings.What remedies does Howard have if he chooses to end the agency relationship?

Question 62

With regard to whistle-blowers:

A) employers may terminate whistle-blowers if they can prove a reason for termination independent of retaliation for the whistle-blowing.
B) based on the employment-at-will doctrine, employers may terminate whistle blowers without evidencing a reason independent of retaliation for the whistle blowing.
C) every state law protects both government and private employees from retaliation.
D) there is no federal whistle-blower act

Question 63

Explain the difference between a frolic and a detour and how they affect or not affect the principal's liability.

Question 64

If a principal would like to keep her identity secret,she would use a/an:

A) disclosed agency.
B) partially disclosed agency.
C) undisclosed agency.
D) independent agency

Question 65

The origination of the employment-at-will doctrine is:

A) based on common law.
B) based on state statutory law.
C) based on federal statutory law.
D) based on constitutional interpretations

Question 66

Generally,the agent's duty to keep an accounting means that the agent must:

A) keep records, receipts and other documentation of costs or income for the principal.
B) be able to verify the exact number of hours acting within the scope of employment.
C) prepare tax returns for the principal pertinent to the agent's financial activities.
D) be able to account for any and all of the principal's funds when they are comingled with the agent's or anyone else's funds

Question 67

With regard to negligent hiring,the courts would require the least amount of scrutiny regarding:

A) an office worker.
B) a teacher.
C) a tour guide.
D) a pizza delivery person

Question 68

The IRS has developed a three prong status to determine an agent's status.Which of the following is not a prong in this test?

A) whether the working relationship is written or oral
B) behavioral aspects of the agency
C) the type of working relationship between the principal and the agent
D) the financial arrangements between the principal and the agent

Question 69

Why is it important for an agent to accurately define their role when signing contracts on behalf of a principal?

Question 70

Mike calls Beth asking her to referee a soccer game.Beth is not obligated to work the game.If she accepts the assignment and works the game she is told the time of the game,she must wear an approved uniform and she is paid a fee.Once on the pitch (field)she is in complete control.Beth is considered a/an:

A) incidental contractor.
B) principal.
C) an employee/agent.
D) independent contractor

Question 71

Courts will apply the ________ analysis to determine the classification of an agent.

A) consistency over form
B) fundamentals over style
C) substance over form
D) classification over mode

Question 72

What is meant by ratification and what three options does a principal have when confronted by a situation involving ratification?

Question 73

Explain the interrelationship of agency law and contract law as they relate to the principal and agent in an agency relationship.

Question 74

When hiring a new employee,or when continuing the current employment of an employee,how and why must an employer take specific steps to protect the public?

Question 75

Name the five agent duties that comprise the agent's fiduciary responsibility to the principal.

Question 76

What is the effect of the employment-at-will doctrine and generally what are the exceptions to its application?

Question 77

In Hayes v Zoological Society of Cincinnati,Hayes was demoted and then fired after reporting dangerous conditions at the defendant zoo and then testifying for Stober,a fellow employee injured at the zoo.She sued based on retaliation.The court found:

A) for the Zoo because Hayes was not a zoologist and therefore not qualified to judge whether conditions were safe or not regarding wild animals.
B) for the zoo because the injury to Stober, Hayes's fellow employee resulted from her assumption of risk and contributory acts by trying to feed a grape to a bear.
C) for Hayes because the Federal Whistle-Blower Act expressly provided protections for employees dealing with institutions directly dealing with the public and the zoo could not justify the demotion and firing independent of retaliation.
D) for Hayes because she reported safety violations that could harm members of the public as covered under Ohio law and the zoo could not justify the demotion and firing independent of retaliation

Question 78

In Edgewater Motels,Inc.v
A) defendant Walgreen has no liability because smoking had nothing to do with Gatzke's duties so the fire was caused by an act outside of the scope of his employment.

A)J. Gatzke and Walgreen Company, Gatzke, an employee agent of Walgreen, while filling out expense reports under the scope of his employment, accidently started a fire due to careless smoking, severely damaging the Edgewater Motel. With regard to the smoking the court determined that:
B) defendant Walgreen is only liable if they knew that Gatzke smoked and did not order him to stop or if they condoned or authorized smoking.
C) Edgewater wins because the smoking occurred as Gatzke was performing his job and the slight deviation for his personal comfort was reasonable and was not a severe departure from his duties.
D) Edgewater wins because Walgreen authorized him to rent the room and Walgreen is therefore liable for any intentional or unintentional acts of their employee agent that result in harm to others.

Question 79

Explain the doctrine of respondeat superior and how it applies to a principal's liability.

Question 80

Donald is an agent representing Xmart,a large department store chain.Xmart has sent him to deal with Fred to purchase Fred's land in order to erect a new store.When Donald first meets Fred,Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on their behalf.Xmart sends Fred a written confirmation of Donald's authorization to act as their agent and states that a contract signed by Donald would be honored by Xmart.Donald and Fred meet every other day during the negotiations.While the negotiations are still ongoing,Donald is fired by Xmart because they don't feel that he is making sufficient progress.Why is it important for Xmart to communicate with Fred regarding Donald's firing?