Agency: 29 & 30 Flashcards
Bob, owner of a small business, goes to Sally to negotiate the purchase of some inventory. Bob has Paul with him, who he introduces to Sally as “Paul, my purchasing manager.” A short while later, Bob says he must leave and says, “You two can conclude this deal.” Paul signs a contract to buy 2,500 units of her product. Paul tells Bob, and Bob then says, “You know you weren’t supposed to buy more than 1,000 units!” Assume that Bob, in fact, had instructed Paul, prior to meeting with Sally, not to buy more than 1,000 units. Can Sally hold Bob to the contract?
A. Yes, because there was apparent authority for the transaction.
B. No, because Paul did not have authority to buy 2,500 units.
C. No, but she can hold him to a purchase of 1,000 units.
D. Yes, because there was implied authority for the transaction.
A. Yes, because there was apparent authority for the transaction.
Charlie Customer goes to Kim, a local travel agent, and buys an airline ticket on BartAir. In this transaction:
A. BartAir is the principal, Kim is its agent.
B. Kim is the agent of both Charlie and BartAir.
C. Charlie is the principal, Kim is his agent.
D. Kim is the agent of neither BartAir nor Charlie.
A. BartAir is the principal, Kim is its agent.
Susan Marie works as a receptionist for a computer software company. Susan Marie works from 8 a.m. to 5 p.m. on Monday through Thursday, and from 8 a.m. to noon on Friday. Susan Marie is paid $15 per hour, and is told how to do her job and what she should be working on at any particular time. The software company and Susan Marie have executed an “independent contractor agreement” in which the terms of this arrangement are specified. Which of the following is true?
A. Susan Marie would be treated as an employee because of the control exercised by the software company over her work and because of the manner in which she is paid.
B. Susan Marie would be treated as an independent contractor because of the terms of the express agreement with the software firm.
C. Susan Marie would be treated as an employee because she is paid for the work that she does.
D. Susan Marie would be treated as an independent contractor because of the irregular working hours of working only part of the day on Fridays.
A. Susan Marie would be treated as an employee because of the control exercised by the software company over her work and because of the manner in which she is paid.
John is hired at minimum wage in a fast-food restaurant. John works at the counter taking customer orders, accepting payment, and giving the orders to the customer. John must work in accordance with a detailed procedures manual. John is:
A. An independent contractor as well as an agent.
B. An employee, but not an agent.
C. An independent contractor, but not an agent.
D. An employee as well as an agent.
D. An employee as well as an agent.
The principal hires an agent to manage his restaurant. As a result, the agent hires two people to serve as waitstaff. The hiring of the waitstaff is an example of what type of authority?
A. Express. B. Implied. C. No authority. D. Apparent. E. Ratified.
B. Implied.
A principal gives an agent express authority to “get his car running right.” The authority that the agent has to enter into contracts for the purchase of auto parts is:
A. Express authority. B. Authority by estoppel. C. Apparent authority. D. Implied authority. E. Inherent authority.
D. Implied authority.
Bob enlists the help of his son to buy a new car. On the way to test-drive several models, Bob tells his son, "I'm leaving this entire decision up to you except that you are not to spend over $20,000 on whatever car you decide on." At the Toyota dealer, Bob tells the salesperson, "I'm turning this whole decision over to my son, so deal with him even though it will be my car." Later, the son returns to the dealership and negotiates the purchase of a Toyota Camry for $21,500. What type of authority, if any, existed for the son to purchase this car? A. Implied. B. Actual. C. Dependent. D. Apparent. E. No authority existed here.
D. Apparent.
You have contracted orally with Patty to buy some real estate on her behalf. The only limitations are that she wants a vacant lot in a residential area for less than $100,000. If you find such a residential lot costing $85,000, what type of authority do you have to enter into this transaction on Patty’s behalf?
Ratification.
Implied.
Apparent.
Express.
Express.
In the context of agency, ratification refers to:
Agreeing to be bound to a contract entered into by an agent that exceeded the agent’s authority at the time the agent entered into it.
Reaffirming a contract to which one previously agreed.
Getting the appropriate agency to agree to take steps to reduce an excessively large rodent population.
Agreeing, after reaching majority, to be bound by a contract entered into as a minor.
Agreeing to be bound to a contract entered into by an agent that exceeded the agent’s authority at the time the agent entered into it.
The death of which party(ies) will cause an agency to terminate? The principal only. The agent only. Either the principal or the agent. Neither the principal nor the agent.
Either the principal or the agent.
The bankruptcy of which party(ies) will cause an agency to terminate? The principal only. The agent only. Either the principal or the agent. Neither the principal nor the agent.
The principal only.
A principal must compensate an agent at the completion of the agency or some other agreed upon time.
True
False
True
Where an employer makes use of a job title in an employment situation, which kind of authority can arise in the employee based on the job title? Inherent authority. Apparent authority. Authority by estoppel. Implied authority. Express authority.
Apparent authority.
An agency may be created even if a person misrepresents himself or herself as being another’s agent when he or she really is not if the purported principal accepts the unauthorized act.
True
False
True
A corporation must conduct all of its business affairs through agents.
True
False
True
A person who is not an employee who is employed by a principal to perform a certain task on his behalf is an independent contractor.
True
False
True
An express written agency agreement that is often used to give an agent the power to sign legal documents on behalf of the principal is know as a(n):
Employer-independent contractor relationship.
Power of attorney.
Employer-employee relationship.
Exclusive agency contract.
Power of attorney.
An attorney is an agent when he represents a client.
True
False
True
Any money or other benefit received by the agent in the course of the agency belongs to the agent.
True
False
False
An agent may continue to represent the principal even after the agency relationship is terminated.
True
False
False
A Boulder manufacturer of computer disk drives has contracted with you for you to be its agent in finding customers for their products. You arrange (without the principal’s knowledge) a sale of the disk drives to a computer assembly business that you and your sister own. You have:
Not violated any of an agent’s duties.
Violated the duty of loyalty by competing with the principal.
Violated the duty of loyalty by engaging in a dual agency.
Violated the duty of loyalty by usurping an opportunity.
Violated the duty of loyalty by self-dealing.
Violated the duty of loyalty by self-dealing.
aulette appointed Angie to be her agent to purchase a building lot for a warehouse in a large city. Angie owns several suitable lots, and a week after the agency arrangement was entered into, said to Paulette, “You know, I own a couple of lots that might work and that I might be willing to sell.” Angie and Paulette then agree on a price for Paulette to buy one of the lots. Angie has:
Not violated any of an agent’s duties.
Violated the duty of loyalty by engaging in a dual agency.
Violated the duty of loyalty by usurping an opportunity.
Violated the duty of loyalty by competing with the principal.
Violated the duty of loyalty by self-dealing.
Not violated any of an agent’s duties.
Agent enters into a contract with Third Party on behalf of Principal. Agent told Third Party that this contract was being entered into on behalf of someone else, but did not identify Principal to Third Party. A couple of weeks later, Principal disappears and Third Party wants to hold Agent to the contract. Third Party can:
Not recover from Agent because Third Party must first try to recover from Principal.
Not recover from Agent because Agent had disclosed the existence of Principal.
Recover from Agent because Agent acted on behalf of an undisclosed principal.
Recover from Agent because Agent had a duty to ensure that Principal performed on the contract.
Recover from Agent because Agent did not disclose the identity of Principal.
Recover from Agent because Agent did not disclose the identity of Principal.
An agent enters into an authorized contract on behalf of the principal. The principal breached the contract and the agent was held to be liable due to the breach of the principal. The agent can seek to recover from the principal based on the principal's duty of: Reimbursement. Indemnification. Cooperation. Contribution. Compensation.
Indemnification.
