Question 1

The Second Restatement provides that the death of a principal terminates all authority of an agent, including apparent authority, even though no notice is given to third parties.

Accepted Answer

A) True 
 B)False  True

Question 2

An employer can be liable for an agent's negligence, but he will never be liable for his intentional torts.

Accepted Answer

A) True 
 B)False  False

Question 3

If Carol, acting as agent for Steve, signs a contract, she alone will be personally bound by it:

Accepted Answer

A)   if Steve's name or the fact that Carol is an agent is never mentioned and Steve does not carry out the contract.
B)   never; as an agent she is only a representative.
C)   if she decides to sue.
D)   if Steve is discovered by the third party to be the principal and the third party elects to hold him liable for performance. A

Question 4

Arthur, who works for Peter, sees what he thinks is a good deal for Peter. Without asking whether he has authority to negotiate the deal, Arthur enters into a contract on Peter's behalf. Peter says later that he isn't interested. Is Peter liable on the contract? Is Arthur liable on the contract? Explain.

Accepted Answer

The answer of Arthur, who works for Peter, sees what...

Question 5

38. The doctrine of is the basis for an employer's liability for an unauthorized tort committed by his employee in the
Course of his employment.

Accepted Answer

A)   indemnification
B)   respondeat superior
C)   apparent authority
D)   direct liability

Question 6

Roy is the promoter of a new corporation that has not yet been organized. On behalf of the as-yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name. The corporation is liable on the contract, because Roy is its agent.

Accepted Answer

A) True 
 B)False

Question 7

Susan is planning to incorporate a new landscaping company, "Evergreen and Growin'." She has held herself out as an agent for Evergreen and has contracted to buy a truck, tools, fertilizer, and seed and also has entered into a lease on behalf of Evergreen for an office. When she fails to get the loan from the bank, she cannot start the business, so she cancels all the contracts. What are the consequences?

Accepted Answer

A)   Susan can cancel all the contracts with no personal liability if she told them she was acting as an agent and expressly warranted that she would not be responsible.
B)   Susan may be held personally liable on the contracts because she misrepresented to third parties that she had authority to make contracts on behalf of a non-existent corporation.
C)   Since the company never existed, she gave no implied warranty.
D)   Susan will be held liable for the contracts only if she ever gets the loan.

Question 8

A person who purports to act as agent for a principal whom both the agent and the third party know to be wholly incompetent is personally liable on a contract entered into with a third person on behalf of such a principal.

Accepted Answer

A) True 
 B)False

Question 9

Paul is a truck driver who owns his own truck and delivers loads to various companies for nine months out of the year. For the hard winter months Paul goes to Key West to "put his feet in the sand." One evening while delivering a load for Emblem Helicopter Parts Co., Paul got into a "little scuffle" with a rowdy trucker who was giving Nell, a waitress at the DewDrop Inn Cafe, a hard time. Paul knocked out five of "Rowdy's" teeth. Rowdy is suing Paul and Emblem for his injuries. Discuss whether Rowdy will win against Emblem on the issue of: (a) respondeat superior and (b) unauthorized acts of agents.

Accepted Answer

The answer of Paul is a truck driver who owns...

Question 10

Apparent authority is actual authority.

Accepted Answer

A) True 
 B)False

Question 11

Under the Third Restatement, an agent who represents an undisclosed principal is discharged from liability if:

Accepted Answer

A)   the third party's judgment against the principal is satisfied.
B)   the third party becomes aware of the principal.
C)   after learning the identity of the principal, the third party gets a judgment against the principal.
D)   The agent is never discharged from liability.

Question 12

Spoken or written words the principal communicates to the agent create:

Accepted Answer

A)   actual, express authority.
B)   actual, implied authority.
C)   apparent authority.
D)   incidental authority.

Question 13

Unless otherwise agreed, an agent making a contract for an unidentified principal is not a party to the contract.

Accepted Answer

A) True 
 B)False

Question 14

Ratification:

Accepted Answer

A)   can only occur after the third person withdraws from the transaction and gives notice of such withdrawal.
B)   can be effected by a disclosed or an undisclosed principal according to the Second Restatement.
C)   relieves the agent of any liability she may have to the third party by reason of her having induced the third party to enter the contract without the principal's authority.
D)   may be made by a principal that was not in existence at the time the contract was made.

Question 15

An agent is not normally liable on a contract he makes with a third party on behalf of a(n) principal.

Accepted Answer

A)   undisclosed
B)   disclosed
C)   partially disclosed
D)   All of these are correct.

Question 16

Southern Furniture Co. hired Chuck to drive a company truck and deliver furniture. Chuck had a spotless driving record and did well on his driving test. Belinda ordered a chair from Southern Furniture Co. and arranged for its delivery on her lunch hour. Belinda was at home when Chuck delivered the chair. After delivering the chair, Chuck brutally assaulted Belinda, causing physical and psychological injuries. Chuck was convicted in the criminal courts. During the trial it was revealed that Chuck had been in a mental institution for the criminally insane for two years because he had assaulted his mother and other women. He also had a lengthy criminal rap sheet involving theft crimes. Belinda sought compensation for her physical and psychological injuries from both Chuck and Southern Furniture Co. in civil court. Discuss the probable outcome of this case with regard to the issues of: (a) respondeat superior and (b) general tort liability of principals for the unauthorized acts of their agents.
Respondeat superior-An employer may be liable for the unauthorized torts committed by an employee, even acts that are in flagrant disobedience of the

Accepted Answer

The answer of Southern Furniture Co. hired Chuck to drive...

Question 17

Which of the following is true with regard to contractual relations between the principal and a third party?

Accepted Answer

A)   There is no liability on the part of the principal if the agent acts with implied authority.
B)   An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise.
C)   Under the Second Restatement, no principal is bound if the agent acts without any authority.
D)   A partially disclosed principal is bound only if the agent acts within the scope of actual authority.

Question 18

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

Accepted Answer

A) True 
 B)False

Question 19

Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent. In reality, Ann had no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

Accepted Answer

A) True 
 B)False

Question 20

Martinez makes a contract with Bowers on behalf of a disclosed principal. If Bowers breaches the contract, ordinarily Martinez has no right of action against Bowers.

Accepted Answer

A) True 
 B)False

Exam 20: Relationship With Third Parties

The Second Restatement provides that the death of a principal terminates all authority of an agent, including apparent authority, even though no notice is given to third parties.

An employer can be liable for an agent's negligence, but he will never be liable for his intentional torts.

If Carol, acting as agent for Steve, signs a contract, she alone will be personally bound by it:

₃₈_._Th_e_doctrin_e_of _i_s_th_e_basi_s_fo_r_a_n_employer'_s_liabilit_y_fo_r_a_n_unauthorize_d_tor_t_committe_d_b_y_hi_s_employe_e_i_n_the Course of his employment.

Roy is the promoter of a new corporation that has not yet been organized. On behalf of the as-yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name. The corporation is liable on the contract, because Roy is its agent.

A person who purports to act as agent for a principal whom both the agent and the third party know to be wholly incompetent is personally liable on a contract entered into with a third person on behalf of such a principal.

Apparent authority is actual authority.

Under the Third Restatement, an agent who represents an undisclosed principal is discharged from liability if:

Spoken or written words the principal communicates to the agent create:

Unless otherwise agreed, an agent making a contract for an unidentified principal is not a party to the contract.

Ratification:

An agent is not normally liable on a contract he makes with a third party on behalf of a(n) principal.

Which of the following is true with regard to contractual relations between the principal and a third party?

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent. In reality, Ann had no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

Martinez makes a contract with Bowers on behalf of a disclosed principal. If Bowers breaches the contract, ordinarily Martinez has no right of action against Bowers.

Exam 20: Relationship With Third Parties

The Second Restatement provides that the death of a principal terminates all authority of an agent, including apparent authority, even though no notice is given to third parties.

An employer can be liable for an agent's negligence, but he will never be liable for his intentional torts.

If Carol, acting as agent for Steve, signs a contract, she alone will be personally bound by it:

38. The doctrine of is the basis for an employer's liability for an unauthorized tort committed by his employee in the Course of his employment.

A person who purports to act as agent for a principal whom both the agent and the third party know to be wholly incompetent is personally liable on a contract entered into with a third person on behalf of such a principal.

Apparent authority is actual authority.

Under the Third Restatement, an agent who represents an undisclosed principal is discharged from liability if:

Spoken or written words the principal communicates to the agent create:

Unless otherwise agreed, an agent making a contract for an unidentified principal is not a party to the contract.

Ratification:

An agent is not normally liable on a contract he makes with a third party on behalf of a(n) principal.

Which of the following is true with regard to contractual relations between the principal and a third party?

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent. In reality, Ann had no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

Martinez makes a contract with Bowers on behalf of a disclosed principal. If Bowers breaches the contract, ordinarily Martinez has no right of action against Bowers.

₃₈_._Th_e_doctrin_e_of _i_s_th_e_basi_s_fo_r_a_n_employer'_s_liabilit_y_fo_r_a_n_unauthorize_d_tor_t_committe_d_b_y_hi_s_employe_e_i_n_the Course of his employment.