Deck 33: B: Agency Liability and Termination

Question 1

A power of attorney confers express authority.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

Apparent authority is authority declared in clear,direct,definite terms.

Question 5

An agent's implied authority can contradict his or her express authority.

Question 6

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

Question 7

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

Question 8

Before a principal can ratify a contract,the third party must withdraw from the deal.

Question 9

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

Question 10

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

Question 11

An agency relationship may be terminated by an act of the parties or by operation of law.

Question 12

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

Question 13

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party.

Question 14

A partially disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

Question 15

If a principal is disclosed,the agent may be liable to a third party for the principal's nonperformance of a contract.

Question 16

A power of attorney can be special or general.

Question 17

An agent's authority must be express for the agent's act to bind a principal.

Question 18

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

Question 19

If a principal is undisclosed,the agent may be liable to the principal for a third party's nonperformance of a contract.

Question 20

Vicarious liability is direct liability.

Question 21

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 22

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 23

Fact Pattern 33-1A
Ulani indicates that she is acting as an agent on behalf of an unidentified client-Thoroughbred Stallions,LLC-when she enters into a contract with Shana.
Refer to Fact Pattern 33-1A.Thoroughbred Stallions is

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

Question 24

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 25

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 26

Security Armored Car Corporation employs Theo as an agent.Without Security's knowledge but otherwise acting within the scope of em?ployment,Theo commits a crime.The state can successfully prosecute

A)neither Security nor Theo.
B)Security only.
C)Security or Theo.
D)Theo only.

Question 27

Commercial Development Corporation (CDC)hires Delta Construction Company to work at a site as an independent contractor.Whether CDC will be liable for torts committed at the site by Delta depends on

A)what Delta bid for the job.
B)whether unusually hazardous activities are involved.
C)which party obtained insurance to cover tort liability.
D)who is paying Delta.

Question 28

Fact Pattern 33-1A
Ulani indicates that she is acting as an agent on behalf of an unidentified client-Thoroughbred Stallions,LLC-when she enters into a contract with Shana.
Refer to Fact Pattern 33-1A.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 29

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 30

Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

A)any transaction causing a loss to Miklos.
B)Miklos's death or incapacity.
C)Miklos's sixty-fifth birthday.
D)Nathalie's handling of one of each stipulated transaction.

Question 31

Sonia manages a Tasty Pastry store for United Food Company.To manage the business,Sonia's authority can be implied by

A)an inference from the position Sonia occupies.
B)any inference a reasonable customer or supplier would make.
C)any inference Sonia chooses to make.
D)no inference.

Question 32

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

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

Question 33

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 34

Clive is a purchasing agent for Double D Ranch with the authority to buy cat?tle at a certain auction.After the cattle are bought,the agency rela?tionship terminates

A)automatically.
B)following notice to all actual cattle sellers.
C)following notice to all potential cattle sellers.
D)following published notice in a local newspaper.

Question 35

Jaclyn,an agent for Kilpatrick,enters into a contract on Kilpatrick's behalf with Leif that must be in writing to be enforceable under the Statute of Frauds.Under the equal dignity rule,Jaclyn's authority to enter into this contract

A)may be oral or written.
B)must be oral and written.
C)must be written.
D)cannot be oral or written.

Question 36

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 37

Trey,an agent for Uno Music Corporation,executes an unau?thor?ized contract with Variety Recording,Inc. ,that is highly ad?vanta?geous to Uno.Variety withdraws from the deal before Uno ratifies the con?tract.The contract is

A)valid.
B)variable.
C)void.
D)voidable.

Question 38

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 39

Rupert,an agent for Star Productions,Inc. ,enters into an unauthorized contract with Theatrical Transport Corporation purportedly on behalf of Star,which refuses to perform.Rupert is liable

A)for breach of contract to Star and Theatrical Transport.
B)for misrepresentation to Star only.
C)for misrepresentation to Theatrical Transport only.
D)to no one.

Question 40

Frida hires Gert,a real estate broker,to act as her agent to sell her house.The house burns down before being sold.The agency agreement is likely

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

Question 41

Brenda is a purchasing agent for Commodities Exchange Corporation.Dennis,a Commodities corporate officer,gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary.The next day,Dennis calls Brenda and tells her to buy only fifty note?book computers and nothing else.Brenda shows the written authority to E-Products,Inc. ,and enters into a contract with E-Products to buy sixty note?book computers and a selection of printers,scanners,and extra storage media.E-Products ships the order to Commodities.Is Commodities li?able to E-Products under the contract? Is Brenda liable? In each case,if so,why? If not,why not?

Question 42

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.