Agency: The Outside Relationship

Question 1

True/False: If apparent authority is present, the principal is liable for even the unauthorized acts of the agent.

Answer 1

True

Question 2

True/False: If ambiguity is present as to the principal’s intent, the court will look to the principal’s subjective intent.

Answer 2

False

Question 3

True/False: If someone acts without authority, a “principal” can decide later to be bound by the actions as long as the “agent” indicates to the third party that he is acting for a principal, the “principal” knows all the material facts of the transaction, and the “principal” accepts the benefit of at least part of the transaction.

Answer 3

False

Question 4

True/False: If Denise is hired to work as a cashier, she has the implied authority to do acts reasonably necessary to carry out her job.

Answer 4

True

Question 5

True/False: The implied authority of an agent is the same an agent’s apparent authority.

Answer 5

False

Question 6

True/False: Respondeat superior means “let the master answer.”

Answer 6

True

Question 7

True/False: As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal.

Answer 7

False

Question 8

True/False: Erica’s supervisor told her to arrange for a conference room at the Kelly Inn. Erica has express authority to contract for the room.

Answer 8

True

Question 9

True/False: An act is not “within the scope of employment” if it is expressly forbidden, even if it is of the same general nature as an authorized act.

Answer 9

False

Question 10

True/False: The issue in apparent authority is what the principal has done to make the third party believe that the agent actually has authority.

Answer 10

True

Question 11

True/False: An employer is generally liable for the intentional wrongful acts of his or her employees.

Answer 11

False

Question 12

True/False: If a principal accepts the benefits of a whole unauthorized contract, the principal is deemed to have ratified the contract and is bound as if the act had been originally authorized.

Answer 12

True

Question 13

True/False: If estoppel applies, the principal would be prevented from asserting that no agency relationship existed.

Answer 13

True

Question 14

True/False: Maylin has the authority to delegate her tasks as agent for Brian unless he has expressly restricted her from doing so.

Answer 14

False

Question 15

True/False: An agent is always liable for his or her own torts committed within the scope of the agency relationship.

Answer 15

True

Question 16

Jenny is a salesperson in a hardware store. As such, she:

Answer 16

a. ) is an agent of the store.
b. ) has express authority to conduct sales transactions.
c. ) has implied authority to conduct sales transactions.
d. ) All the above are correct.

Question 17

The doctrine of estoppel would most often apply in situations of:

Answer 17

apparent authority.

Question 18

Express authority can be created by:

Answer 18

a. ) words spoken directly to the agent.
b. ) conduct.
c. ) written words given to one person to give to another person, the agent.
d. ) All the above.

Question 19

Thomas, the manager of an apartment complex, rented an apartment to Donna. A few weeks later, Donna complained that the hot water did not work. Thomas hired Hometown Plumbers to fix the hot water, but the job was not successful. A few days later Donna moved out since she had no hot water. She sued the landlord and Thomas for breach of contract.

Answer 19

The landlord is liable, but not Thomas.

Question 20

In the Dickinson v. Charter Oaks case, the court found:

Answer 20

a reasonable inference could be made that Carol Dickinson knowingly permitted her husband to act as having apparent authority.

Question 21

Circus Pizza contracted with Art to run its birthday parties. Art’s responsibilities included supervising the children and organizing the games. Circus did not investigate Art’s background, which included a history of assaulting children. Art assaulted a 7-year-old girl in the restaurant’s kitchen during a birthday party. Circus Pizza:

Answer 21

may be held liable on the basis of negligent hiring.

Question 22

Kirk is bound by the acts of his agent, Tyra, if:

Answer 22

a. ) Tyra has express, implied, or apparent authority for the acts.
b. ) for reasons of fairness, Kirk is estopped from denying that Tyra had authority for the acts.
c. ) Kirk fails to repudiate an unauthorized transaction after knowing all the material facts of the transaction.
d. ) All of the above.

Question 23

Paula appointed Al to be her agent via a contract in writing that spelled out the scope of Al’s authority. The contract provided that Al was not to disclose that he was acting on behalf of Paula. In entering into a contract for Paula, Al did not disclose to the third party that he was acting as an agent. In this case, the principal was:

Answer 23

undisclosed.

Question 24

When a principal is partially disclosed:

Answer 24

the agent and principal will be jointly and severally liable on the contract.

Question 25

If an employer and employee are jointly and severally liable, the third party:

Answer 25

can collect the full award from either the employee or employer.

Question 26

Mike worked for Frank’s Pizza as a driver. His duties consisted of making deliveries along a designated route. One day Mike decided to see his girlfriend, Jackie, who lived 50 miles out of his pizza route. While driving to his girlfriend’s, Mike injured a pedestrian, Chuck. The accident was caused because of Mike’s negligent operation of the delivery truck. Chuck is now suing both Mike and Frank’s for personal injuries. Under the circumstances:

Answer 26

Frank’s is probably not liable because Mike’s excursion was not within the scope of his employment.

Question 27

Factors influencing whether a servant is acting within the scope of employment include all but which of the following?

Answer 27

All of the answer choices are factors in determining if an act is “within the scope of employment.”

Question 28

Fact Pattern 29-1
Rosa was authorized to purchase computer equipment for her company, Zebra Toy Company. Her employer required her to obtain written approval from the vice president if she wanted to buy more than $100,000 of equipment. One day Rosa purchased $225,000 of computer equipment from Computer Sales Company, without written approval.

Which of the following is correct?

Answer 28

Zebra Toy must honor the contract if Computer Sales reasonably believed Rosa had the authority to purchase the equipment.

Question 29

Fact Pattern 29-1
Rosa was authorized to purchase computer equipment for her company, Zebra Toy Company. Her employer required her to obtain written approval from the vice president if she wanted to buy more than $100,000 of equipment. One day Rosa purchased $225,000 of computer equipment from Computer Sales Company, without written approval.

If Zebra Toy Company purchases the equipment:

Answer 29

it will be doing what it had to do, since Rosa had the apparent authority to buy the equipment.

Question 30

Fact Pattern 29-2
Judy was the manager of an apartment complex. She hired Rick to mow the lawns. One afternoon while Rick is mowing the lawn, his negligence caused damage to Terri’s car.

If Rick is an employee, who is liable to Terri?

Answer 30

The landlord and Rick.

Question 31

Fact Pattern 29-2
Judy was the manager of an apartment complex. She hired Rick to mow the lawns. One afternoon while Rick is mowing the lawn, his negligence caused damage to Terri’s car.

If Rick is an independent contractor, who is liable to Terri?

Answer 31

Only Rick.

Question 32

Fact Pattern 29-2
Judy was the manager of an apartment complex. She hired Rick to mow the lawns. One afternoon while Rick is mowing the lawn, his negligence caused damage to Terri’s car.

If Judy had been negligent in hiring Rick, who is liable to Terri?

Answer 32

The landlord, Judy, and Rick.

Question 33

Joan agrees to try to negotiate the purchase of an acre of land for a prospective office building on behalf of Cheryl, who does not want to be identified to the seller. Joan tells the seller, “My friend is interested in purchasing this land.” If the seller contracts with Joan, Cheryl is:

Answer 33

an unidentified principal, and in case of a breach of contract Joan and Cheryl are jointly and severally liable.

Question 34

The doctrine of respondeat superior:

Answer 34

applies to employees but not independent contractors.

Question 35

Jackie is an employee for Hardware Store, Inc. When attempting to open a can of bright orange paint, she accidentally spills paint on Maggie, a customer in the store. Maggie claims that her $800 business suit is ruined. The legal liability here can best be described as:

Answer 35

Both the store and Jackie are liable to Maggie.

Question 36

Chance is a traveling marketing representative for a publishing company. He is an independent contractor. One afternoon while driving to a meeting, he negligently runs a stop sign and causes an accident. Judy is injured. Judy can:

Answer 36

hold Chance but not the company liable.

Question 37

Which of the following statements is correct?

Answer 37

An employer is liable for the intentional misconduct of his employee if that employee was motivated, at least in part, by a desire to serve the employer.

Question 38

While at work one evening, Joe was confronted by Tim. Tim had come into the store and accused Joe of trying to steal his girlfriend. Joe told Tim he was crazy but Tim persisted in yelling at Joe. Joe, now angered, stepped around the cash register and hit Tim in the jaw. Tim was seriously injured and sued Joe and his employer for his damages.

Answer 38

Joe, but not his employer, is probably liable to Tim.

Question 39

Renee works for a restaurant. One Saturday morning, she and several other employees participate in a “fun run” to benefit a charitable cause. She is not paid for this activity but she and her co-workers wear clothing bearing the company’s name. While running through a street, Renee accidentally trips a fellow runner. The runner claims that both Renee and her company are liable for his injuries. Most likely:

Answer 39

the court would consider whether Renee was acting within the scope of her employment during the fun run.

Question 40

An employer can be liable for:

Answer 40

a. ) the negligent torts of his employee that cause physical harm to property.
b. ) the misrepresentation of his employee.
c. ) his employee’s defamatory statements.
d. ) All the above.