CH 5 - Agency

Question 1

___ means the authority expressly given by a principal or given by the law

Answer 1

Actual authority

Question 2

When a principal causes a third person to believe that another person is his or her agent, and the third person deals with the supposed agent, the principal is “estopped to deny” the agency relationship. In such a situation, the principal’s actions create the appearance of an agency that does not in fact exist

Answer 2

Agency by estoppel

Question 3

A person who is in fact not an agent or who is an agent acting outside the scope of his or her authority may make a contract on behalf of another (a principal). If the principal affirms that contract by word or by action, an __ is created

Answer 3

Agency by ratification

Question 4

Even if an employee was acting outside the scope of employment, the employer may still be liable for the employee’s action if
(1) the employer intended the employee’s conduct or its consequences,
(2) the employee’s high rank in the company makes him or her the employer’s alter ego,
(3) the employee’s action can be attributed to the employer’s own negligence or reck-
lessness,
(4) the conduct violated a nondelegable duty of the employer,
(5) the employee purported to act or to speak on behalf of the employer and there was reliance on apparent authority, or, in jurisdictions that follow the Restatement (Second) of Agency, the employee was ___ the tort by the existence of the agency relation

Answer 4

Aided in accomplishing theory

Question 5

purported

Answer 5

appearing or stated to be true, though not necessarily so; alleged.

Question 6

A ___states that the user is deemed to assent to its terms by its continued use of the website

Answer 6

Browse wrap agreement

Question 7

A prominent feature of electronic commerce is the ___ (or agreement) whereby users assent to a license agreement by clicking on an acceptance box

Answer 7

Click wrap license or agreement

Question 8

___ consists of the authority that agents of that type normally would possess

Answer 8

Customary authority

Question 9

The ___ includes a duty to avoid mistakes, whether through negligence, recklessness, or intentional misconduct

Answer 9

Duty of care

Question 10

The agent has the duty to act solely for the benefit of his or her principal, and not in the interest of the agent or of a third person

Answer 10

Duty of loyalty

Question 11

An agent has a duty to follow all lawful and clearly stated instructions of the principal. In case of emergency, the agent may deviate from the instructions without violating his duty. If the instructions are not clearly stated, the agent can fulfill the ___ (1) by acting in good faith and (2) in a manner reasonable under the circumstances

Answer 11

duty of obedience

Question 12

A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual

Answer 12

Electronic agents

Question 13

The basic characteristic of this relationship is that the employer has the right to control the conduct of the employee

Answer 13

Employer-employee relationship

Question 14

If the agent enters into an agreement of a type that must be in writing to be enforceable (such as an agreement for the sale of real property), then the agent’s signature on the agreement will not bind the principal unless the agency relationship itself is evidenced by some signed writing. This is called the

Answer 14

Equal dignities rule

Question 15

A principal can confer ___ by actual words— for example, a request that the agent hire an architect to design a new office building. ___ may also be given by an action that indicates the principal’s consent— for example, sending the agent a check for the architect’s retainer. An agent has ___ if the agent has a justifiable belief that the principal has authorized the agent to do what he or she is doing

Answer 15

Express authority

Question 16

___ occurs when the principal, through words or behavior, manifests an intent to be bound by the agent’s act. For example, a principal could ratify an agent’s unauthorized purchase of a truck by saying “OK” or simply by paying the bill for the vehicle

Answer 16

Express ratification

Question 17

By agreeing to act on behalf of the principal, the agent becomes a ___. Loyalty, obedience, and care are the hallmarks of the ___relationship

Answer 17

Fiduciary = involving trust, especially with regard to the relationship between a trustee and a beneficiary.

Question 18

Once an agent is given express authority, he or she also has ___ to do whatever is reasonable to complete the task at hand.

Answer 18

implied authority

Question 19

A contract ratification can either be implied
or expressed. If a contract is expressed, it must include direct terms of assent, while an implied contract typically is based on implied laws

Answer 19

Implied ratification

Question 20

An ___ , such as a lawyer working for a client or a plumber working for a house builder, is not an employee of the person paying for his or her services, because the ___ conduct is not fully subject to that person’s control. The person hiring an ___ bargains only for results

Answer 20

independent contractor

Question 21

The principal can bind himself or herself to an agent’s unauthorized acts through ___ —that is, affirmation—of the prior acts. When an act has been ___, it is then treated as if the principal had originally authorized it

Answer 21

Ratification

Question 22

Under the doctrine of ___ , an agent’s employer will be liable for any injuries or damage to the property of another that the agent causes

Answer 22

Respondeat Superior

Question 23

An agent may lawfully conceal the principal’s identity or even his or her existence. This may be desirable, for instance, when the principal is trying to buy adjacent properties in an area before news of a business venture is made public

Answer 23

Undisclosed principal^

Question 24

___ is the authority that the agent has been allowed to exercise in the past

Answer 24

Usual authority

Question 25

an employer is directly liable for its own negligence in hiring or supervising an employee. In addition, the employer may be ___ for an employee’s wrongful acts, even though the employer had no knowledge of them and in no way directed them, if the acts were committed while the employee was acting within the scope of employment. Example: if a zipline employee drunkenly doesn’t strap someone in and they fall, the company may be held liable

Answer 25

Vicarious liability