Deck 39: Liability of Principal and Agent; Termination of Agency

Question 1

As long as an agent has authorization, express, implied or apparent, she may bind the principal legally.

Answer 1

True

Question 2

An employer cannot be criminally liable for acts of the employee.

Answer 2

False

Question 3

A partially disclosed agent can be a liable on a contract he makes.

Answer 3

True

Question 4

Under the family purpose doctrine for the use of automobiles, a family member who negligently injures someone with a car subjects the owner to liability if the family member was furthering family purposes.

Question 5

Vicarious liability is not limited to harm caused in the course of an agency relationship.

Question 6

Unlike wives, children are not presumed at common law to be agents or extensions of the father.

Question 7

Where a third party deals with an agent, but is unaware that he/she is dealing with an agent, the principal would be contractually bound to the third party for any tort.

Question 8

Even if the agent possessed no actual authority and there was no apparent authority on which the third party could rely, the principal may still be liable if he ratifies or adopts the agent's acts before the third party withdraws from the contract.

Question 9

An agent is personally liable for torts she commits in the scope of employment.

Question 10

When an agency is terminated after lapse of time or completion of work, it is said to be expressly terminated.

Question 11

A principal can be held liable for actions by an agent that the principal had no knowledge of.

Question 12

Under the zone of risk test an employer may be held liable for his employee's conduct even when devoted entirely to the employee's own purposes.

Question 13

Arthur Agent was hired to manage the Main Street Apartments for Pauline Principal; nothing was said as to maintenance expenses. Tenant informed Agent of a plumbing problem, and Agent telephoned Plumber to fix it. Plumber sent the bill to Principal, who denied Agent's authority to hire a plumber ("My cousin is a plumber, and that's who I use," she said). Principle is not liable.

Question 14

The vicarious tort liability is primarily a function of agency status and not employment relationships.

Question 15

The key to determining whether a principal is liable for contracts made by his agent is the amount of compensation paid to the agent.

Question 16

An agent may exceed his express authority and still bind the principal.

Question 17

If a principal directs the agent to commit a tort or knows for a fact that the agent carrying out his instructions could cause someone harm, then the principal is liable.

Question 18

Agent acts within her authority but doesn't disclose to third party the existence of any agency. Agent's principal is not bound.

Question 19

An agent is not liable for torts of other agents unless he is personally at fault.

Question 20

Respondeat superior is the Latin term for the shop rights doctrine.

Question 21

Abigail Agent is asked by Principal to buy a parcel of real estate for Principal's business expansion, but not to reveal the existence of the agency relationship.
a. It is unconscionable for Agent to trick the third party by not disclosing the agency.
b. Agent may be liable to the third party.
c. Agent can have no liability to the third party, only Principal is liable.
d. Third Party has no recourse against either Principal or Agent.
e. Principal cannot be liable to Third Party

Question 22

The principal's unilateral termination of agency is known as _____ of agency.

A) revocation
B) renunciation
C) cancellation
D) falsification
E) liquidation

Question 23

Apparent authority arises from the third party's interpretation of the agent's words and actions.

Question 24

According to the _____ standard, an employer can be held liable for his employee's conduct even when devoted entirely to the employee's own purposes, as long as it was foreseeable that the agent might act as he did.

A) employment-at-will
B) no-fault
C) zone of tolerance
D) zone of risk
E) scope of employment

Question 25

According to the doctrine of _____, a person will not be allowed to deny a promise or assertion he/she previously made where there has been detrimental reliance on that promise or assertion.

A) employment-at-will
B) shop rights
C) ultra vires
D) respondeat superior
E) estoppel

Question 26

Mallory told his employee Wilmot to stop taking clients to Expensive Restaurant any more, but didn't say anything to the restaurant. Two days later Wilmot took Client to the restaurant for a business lunch. Mallory is liable.

Question 27

In case of the use of automobiles, explain two approaches that impose tort liability on the owner of the automobile.

Question 28

An employer will never be liable for her employee's intentional tort.

Question 29

Bob, a professional hockey player, asks Will to be his sports agent and Will accepts. Bob tells Will that Will can review the contracts offered to Bob from the various state hockey teams. Here, Will has _____ authority to review contracts.

A) implied
B) express
C) written
D) apparent
E) irrecoverable

Question 30

In which of the following cases would an agent be personally liable to the other party in a contract?

A) The agent is acting on behalf of an undisclosed principal.
B) The agent makes a contract on the principal's behalf.
C) The agent lacks the principal's authority or exceeds it.
D) Other agents of the principal committed torts.
E) The agent is directed by the principal to commit a tort.

Question 31

The agent's unilateral termination of the agency relationship is known as _____.

A) revocation
B) renunciation
C) cancellation
D) falsification
E) liquidation

Question 32

In agency, _____ authority is a situation in which an agent leads a third party to believe that the agent has authority to bind the principal, even where the agent lacks actual authority to bind the principal.

A) incontestable
B) express
C) implied
D) apparent
E) independent

Question 33

Termination of agency by operation of law occurs:

A) upon renunciation of agency by the agent.
B) on the death of the principal or agent.
C) upon revocation of agency.
D) upon the expiration of a fixed period of time.
E) on the accomplishment of a specific task.

Question 34

Kevin, a close friend of Dave's, borrowed Dave's car for the weekend, with Dave's permission. While driving, Kevin accidently ran into someone on the street. According to which of the following statutes would Dave be responsible or liable for Kelvin's act?

A) The direct liability statute
B) The family purpose statute
C) The doctrine of estoppel
D) The owner's consent statute
E) The no-fault statute

Question 35

Differentiate between direct liability and vicarious liability of the principal.

Question 36

A principal is considered to be vicariously responsible for his/her agent's torts if:

A) the principal gave the agent improper orders or instructions that caused the tort to occur.
B) the principal had no intention to commit and no involvement in the agent's acts.
C) the agent was improperly or negligently chosen or employed.
D) the principal failed properly to supervise or oversee the work when he had a duty to do so.
E) the principal had been negligent in performing his duties.

Question 37

The _____ doctrine imposes vicarious liability on the principal in case of an agency relationship.

A) employment-at-will
B) estoppel
C) master-servant
D) ultra vires
E) family purpose

Question 38

Creditor has dealt with the partnership of A, B, and C for some years. Unknown to Creditor C withdrew from the firm. Not long after, A and B approach Creditor, who extends credit to the firm. If A or B don't pay, C is liable.

Question 39

A principal can be held responsible for an agent whose authority has previously been terminated if the principal does not make the termination known to the parties who previously did business with the agent. This is known as _____ authority.

A) express
B) implied
C) lingering
D) master-servant
E) inter vivos

Question 40

A modern basis for vicarious liability is termed the _____ theory as it assumes that the principal is better equipped to pay damages than an agent.

A) no-fault
B) ultra vires
C) deep pockets
D) entity
E) delectus personae