Deck 20: Agency

Question 1

When an agent fails to perform his or her duties,liability for breach of contract may result.

Answer 1

True

Question 2

Ratification occurs when a principal accepts responsibility for an agent's unauthorized act.

Answer 2

True

Question 3

A principal may be liable for the tort of an agent committed within the scope of the agency or employment.

Answer 3

True

Question 4

A principal owes an agent a duty of estoppel.

Question 5

Apparent authority arises from what the principal makes clear to the agent.

Question 6

Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies.

Question 7

An agent's authority to act on behalf of a principal must be actual and apparent.

Question 8

An employee may not act in the capacity of an agent.

Question 9

A principal who authorizes an agent to commit a tort is not liable to persons or property injured thereby.

Question 10

An agency coupled with an interest is an agency created for the agent's benefit.

Question 11

Under the doctrine of respondeat superior,an agent is liable for any harm to his or her principal.

Question 12

An agent has the implied authority to do what is reasonably necessary to carry out express au?thor?ity.

Question 13

A principal owes his or her agent a duty to act in good faith.

Question 14

An agreement to form an agency relationship can be oral.

Question 15

Normally,all employees who deal with third parties are deemed to be agents.

Question 16

Independent contractors have no control over the details of their work performance.

Question 17

A principal whose identity is known by a third party with whom an agent contracts on the principal's behalf is a disclosed principal.

Question 18

An agency relationship may be terminated by an act of the parties but not by operation of law.

Question 19

Agency relationships normally are consensual.

Question 20

Acts of a purported agent in and of themselves can create an agency by estoppel.

Question 21

Home Development Company employs llya to buy property for a future residential development.Ilya secretly buys some of the property and sells it to Home Development at a profit.Ilya has breached

A)no duty.
B)the duty of accounting.
C)the duty of loyalty.
D)the duty of notification.

Question 22

Fact Pattern
Maya and Noel work at OpenFlo Plumbing Supply.Maya is a plumbing engineer who works with OpenFlo cli?ents on residential plumbing and field draining and irrigation projects.OpenFlo closely supervises all of its engineers,and dictates their work schedules.Noel works part-time in the evenings cleaning the offices and warehouse.
Refer to Fact Pattern 20-1A.Noel is OpenFlo's

A)agent but not employee.
B)employee and agent.
C)employee or independent contractor,depending on whether OpenFlo controls the details of his physical performance.
D)independent contractor.

Question 23

Homer is an officer of Integrity Corporation.With respect to binding Integrity to contracts,Homer's authority

A)may be actual or apparent.
B)must be actual and apparent.
C)must be actual and not apparent.
D)cannot be actual or apparent.

Question 24

Fabulous Auto Sales,Inc. ,employs GR8 Collection Company as a collection agent.While repossessing a car from Hadji,one of Fabulous's customers,GR8 causes an accident in which Hadji is injured.Hadji can recover from

A)Fabulous only.
B)Fabulous or GR8.
C)GR8 only.
D)Hadji's insurance company only.

Question 25

Diego is a truck driver for Entertainment Supplies Company (ESC).Diego does exactly what ESC tells him.Diego is

A)an employee.
B)an employer.
C)an independent contractor.
D)a principal.

Question 26

Louis,a certified public accountant and an investor,and Maria,an in?surance salesperson and a realtor,may create an agency relationship for

A)a business purpose only.
B)a legal purpose only.
C)any purpose.
D)no purpose.

Question 27

Genetic Seed Company hires Howie to work on Genetic's shipping dock,accepting deliveries and dealing with other companies' drivers.With respect to Genetic,Howie is most likely

A)an agent.
B)an independent contractor.
C)a principal.
D)a work for hire.

Question 28

Emery is an agent for Downtown Market Corporation.Emery makes an innocent mis?representation when entering into a contract on be?half of Downtown Market with Cool Fruits,Inc.Cool Fruits

A)is directly responsible for performing the contract.
B)is estopped from performing the contract.
C)may rescind the contract.
D)must ratify the contract.

Question 29

Rangler contracts with Siena to buy a certain horse for her.Rangler makes a deal with Timberline Stables,the owner of the horse,and makes a down payment.Siena fails to pay the rest of the price.Timberline sues Rangler for breach of contract.His right to hold Siena liable for any damages that he has to pay is the right of

A)avoidance.
B)cooperation.
C)indemnification.
D)reimbursement.

Question 30

Glen is an agent for Hi-Flite,Inc.On Hi-Flite's behalf and at its request,Glen pays Ian for certain plane maintenance and repair serv?ices.Glen's right to obtain the amount of those payments from Hi-Flite arises under the principal's duty of

A)avoidance.
B)cooperation.
C)indemnification.
D)reimbursement.

Question 31

Omar hires Petra,a real estate broker,to act as his agent to sell his land for $150,000.Oil is discovered beneath the land,causing its market value to in?crease considerably.The agency agreement is likely

A)still in force if Omar gives Petra additional consideration.
B)still in force if Petra does not tell prospective customers.
C)terminated by mutual consent of the parties.
D)terminated by operation of law.

Question 32

Meals n' More,Inc. ,a catering company,requires its customers to pay by check.Lyra,a Meals n' More driver,tells customers that they can pay her with cash.When Meals n' More learns of Lyra's collections,it takes no action to stop it.Lyra steals some of the cash.Meals n' More may suffer the loss under the doc?trine of

A)apparent authority.
B)express authority.
C)implied authority.
D)no authority.

Question 33

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends.If Jill is liable for Kelly's actions,it will be under

A)the doctrine of estoppel.
B)the equal dignity rule.
C)the fiduciary principle.
D)the good faith statute.

Question 34

Ozzy is an officer of Prudent Financial Corporation.Ozzy serves in a representative capacity for Prudent Financial's owners.With respect to binding Prudent Financial to contracts,Ozzy is

A)an agent and has the authority.
B)an agent but does not have the authority.
C)not an agent and does not have the authority.
D)not an agent but does have the authority.

Question 35

Fact Pattern
Ulani indicates that she is acting as an agent on behalf of an unnamed client-Thoroughbred Stallions,LLC-when she enters into a contract with Shana.
Refer to Fact Pattern 20-1A.Liability to Shana for nonper?formance of the con?tract may be imposed on

A)neither Ulani nor Thoroughbred Stallions.
B)Ulani and Thoroughbred Stallions.
C)Ulani only.
D)Thoroughbred Stallions only.

Question 36

Fact Pattern
Maya and Noel work at OpenFlo Plumbing Supply.Maya is a plumbing engineer who works with OpenFlo cli?ents on residential plumbing and field draining and irrigation projects.OpenFlo closely supervises all of its engineers,and dictates their work schedules.Noel works part-time in the evenings cleaning the offices and warehouse.
Refer to Fact Pattern 20-1A.Maya is OpenFlo's

A)employee,agent,and independent contractor.
B)employee and agent.
C)employee but not agent.
D)independent contractor.

Question 37

Elin,an agent for First Credit Corporation (FC),enters into an unau?thorized contract with Great Expectations,Inc.(GE),purportedly on FC's behalf.This contract will be enforceable if it is ratified by

A)any third party.
B)Elin.
C)FC.
D)GE.

Question 38

Fact Pattern
Ulani indicates that she is acting as an agent on behalf of an unnamed client-Thoroughbred Stallions,LLC-when she enters into a contract with Shana.
Refer to Fact Pattern 20-1A.Thoroughbred Stallions is

A)a disclosed principal.
B)a non-existent principal.
C)an undisclosed principal.
D)an unidentified principal.

Question 39

BizOnline.com uses an electronic agent,or e-agent,to perform certain tasks in e-commerce.With respect to the e-agent's actions,BizOnline.com is bound by

A)all of the actions.
B)only those actions of which BizOnline.com is aware.
C)only those actions that BizOnline.com does not refute.
D)only those actions that BizOnine.com ratifies.

Question 40

Cory employs Daily Delivery Agency as an agent under a writ?ten agreement that describes the rights and duties of both parties.This is

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

Question 41

Tropical Vittles,LLC,hires Sophie to act as its agent to buy a ten-acre tract of land from Rico for $1,000 per acre.Tropical Vittles does not want Rico to know that it is the principal or that Sophie is its agent.Tropical Vittles wants the land for a new fast-food restaurant,and believes that Rico may not sell the land for that purpose or may demand a premium price.Sophie makes the purchase,signing only her name to the contract as the buyer and not disclosing to Rico the agency relationship.The transfer of the deed is to occur on May 1.Rico learns of Tropical Vittles's identity on April 15.Can Rico legally refuse to deed the property on May 1? Explain.

Question 42

Arnold is the chief executive officer of Beta Corporation.Arnold's re?sponsibilities include decisions on product development,marketing,and other significant business directions.Arnold is subject to the approval and oversight of Beta's board of directors.Carol is a Beta manager whose duties include the firm's day-to-day hiring,firing,purchasing,and sell?ing.Dave is a Beta salesperson,whose daily activities are con?trolled by Carol.Erin writes technical manuals for Beta products ac?cording to Arnold's instructions and subject to Beta's control,but has no dealings with Beta custom?ers or sup?pliers.Fred edits the manuals on a contract-per-manual basis and is not otherwise subject to Beta's control.Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?