Lecture 6A Flashcards
Reed & Keast v McKenzie Co Ltd is a leading case on:
A) Implied authority
B) Agency by necessity
C) Apparent (ostensible) authority
D) Ratified authority
C) Apparent (ostensible) authority
In Reed & Keast, the court held that McKenzie Co Ltd was bound by the contract because:
A) The agent had implied authority based on his job title
B) The principal ratified the contract afterward
C) The third party was told explicitly about the limitation
D) The principal had armed the agent with contract forms and failed to communicate the limitation
D) The principal had armed the agent with contract forms and failed to communicate the limitation
In Freeman & Lockyer v Buckhurst Park Properties, the company was held liable because:
A) The agent had actual authority to hire the architects
B) The director had express permission from the board
C) The company’s conduct gave the impression that the agent had authority
D) The third party signed a waiver agreeing to any risks
C) The company’s conduct gave the impression that the agent had authority
Which of the following is NOT one of the four conditions for apparent authority as stated in Freeman & Lockyer?
A) Representation must be made by someone with actual authority
B) Third party must rely on the representation
C) Agent must have actual authority
D) The company must have the capacity to enter into the contract
C) Agent must have actual authority
In Doiron v Devon Capital Corp, the court ruled that Manulife was NOT liable because:
A) The agent acted with actual authority
B) Manulife directly endorsed the investment
C) There was no representation by Manulife that the agent was acting on its behalf
D) The third party signed a contract with Manulife
C) There was no representation by Manulife that the agent was acting on its behalf
In Sims & Co v Midland Railway Co, the court upheld the railway company’s actions because:
A) They had written consent from the owner
B) They acted out of commercial necessity
C) They acted on instructions from the shipping company
D) The goods were insured
B) They acted out of commercial necessity
Which of the following best applies to the principle from Doucette v Seymour?
A) An agent’s authority is presumed when acting on behalf of a spouse
B) Apparent authority can arise from marital relationships
C) Without actual, implied, or apparent authority, an agent cannot bind the principal
D) An oral agreement between spouses is automatically binding in contract law
C) Without actual, implied, or apparent authority, an agent cannot bind the principal
If a person acts without authority but the principal later accepts the agreement and benefits from it, this is known as:
A) Apparent authority
B) Ratification
C) Estoppel
D) Necessity
B) Ratification
A stockbroker exceeds their authority by buying risky stocks for a conservative client. The client later learns of the purchase and sells the stocks at a profit. This is an example of:
A) Implied authority
B) Apparent authority
C) Agency by necessity
D) Ratification
D) Ratification
Which case involved an agent being told to disclose a limitation on their authority but failing to do so, resulting in the principal being bound?
A) Freeman & Lockyer v Buckhurst Park Properties
B) Doiron v Devon Capital Corp
C) Reed & Keast v McKenzie Co Ltd
D) Sims & Co v Midland Railway Co
C) Reed & Keast v McKenzie Co Ltd
Which of the following situations would most likely support a finding of implied authority?
A) An agent signs a high-value contract despite being told not to
B) A long-serving employee hires a courier, which they have done regularly in their role
C) A real estate agent sells a car for the principal
D) A volunteer accepts donations on behalf of an organization without telling them
B) A long-serving employee hires a courier, which they have done regularly in their role
In Doucette v Seymour, why was the agent (Kim) not able to bind the principal (Darin)?
A) She was not his employee
B) She had not signed any documents
C) There was no actual, implied, or apparent authority, and no ratification occurred
D) She revoked her own authority before the contract
C) There was no actual, implied, or apparent authority, and no ratification occurred
A warehouse manager sells goods in an emergency because they are leaking hazardous chemicals and could cause harm. Which form of agency might apply?
A) Agency by estoppel
B) Agency by necessity
C) Apparent authority
D) Express authority
B) Agency by necessity
Which of the following best illustrates apparent authority?
A) An agent signs a deal after being explicitly told not to by the principal
B) A principal allows an agent to attend meetings and negotiate with clients, leading others to believe they have signing authority
C) An agent acts in a genuine emergency to prevent loss
D) A principal approves a contract signed by someone unauthorized
B) A principal allows an agent to attend meetings and negotiate with clients, leading others to believe they have signing authority
Which case emphasizes the need for a third party to show that they reasonably relied on a representation made by someone with actual authority?
A) Freeman & Lockyer v Buckhurst Park Properties
B) Doucette v Seymour
C) Sims & Co v Midland Railway Co
D) Reed & Keast v McKenzie Co Ltd
A) Freeman & Lockyer v Buckhurst Park Properties
In the context of agency law, which of the following statements is TRUE?
A) An agent can bind the principal in all cases if they believe they are doing the right thing
B) Implied authority is the same as apparent authority
C) A principal can be bound even when they didn’t authorize the act, if they later ratify it
D) Apparent authority is based solely on the agent’s own belief about their power
C) A principal can be bound even when they didn’t authorize the act, if they later ratify it
Sophie, a sales representative at PureTech Ltd., has been regularly meeting with clients and finalizing supply agreements on behalf of the company. Although she has no written authority, the company’s senior leadership is aware she’s been doing this and has never intervened. One day, she signs a high-value contract with NovaCorp Inc. The company now refuses to honor the deal, claiming Sophie had no actual authority.
Question:
Advise NovaCorp on whether the contract is enforceable. What type(s) of authority may exist? Which case law supports your argument?
Relevant Authority: Apparent authority
Case Law: Freeman & Lockyer v Buckhurst Park Properties
Jake, a regional agent for BrightHarvest Ltd., is given standard contract forms to sign with local grocery chains. He is told verbally that he cannot commit to contracts over 50 units of produce without approval. He signs a contract for 200 units with GreenGrocer Ltd. using the standard form but fails to inform them of the limitation.
Question:
Is BrightHarvest Ltd. bound by the contract with GreenGrocer? Identify the legal issue and apply the appropriate case law.
Relevant Authority: Apparent authority
Case Law: Reed & Keast v McKenzie Co Ltd
Mira had previously purchased insurance and RRSPs through a financial advisor named Vince, who worked under the SunLife brand. A year later, Vince tells Mira about a new “SunLife opportunity” and takes $80,000 from her, investing it in a company not actually associated with SunLife. Mira assumed it was a SunLife product, but she never asked and was never told otherwise.
Question:
Can Mira sue SunLife for the loss? Analyze the agency relationship and the likelihood of finding apparent authority. What case law is most relevant?
Relevant Authority: Apparent authority (lack thereof)
Case Law: Doiron v Devon Capital Corp
A trucking company is transporting frozen seafood when the vehicle breaks down in the summer heat. The cargo is rapidly thawing. The driver, unable to reach the company or the client due to poor reception, decides to sell the fish at a local market to minimize loss. The client later sues, claiming the driver had no authority to sell their goods.
Question:
Can the driver’s actions be justified under agency law? What conditions must be met? Which case applies?
Relevant Authority: Agency by necessity
Case Law: Sims & Co v Midland Railway Co
Alex wins a prize draw hosted by a car dealership, but he can’t attend. He sends his wife, Marie, to pick up the prize. While at the event, Marie agrees with four other finalists to split the $100,000 prize equally no matter who wins. Alex ends up winning, but refuses to share. The others sue, arguing that Marie acted on Alex’s behalf.
Question:
Was Marie authorized to make the agreement? Does Alex owe a share of the prize to the others? Discuss the relevant types of authority and apply the best case law.
Relevant Authority: Actual, implied, apparent authority – none found; no ratification
Case Law: Doucette v Seymour
Daniel, a junior employee at a logistics firm, signs a delivery contract with a local business while the manager is away. When the manager returns, he doesn’t say anything but allows the deliveries to continue and invoices to be sent. Later, a dispute arises and the company tries to deny the contract.
Question:
Is the company bound by the contract Daniel signed? Consider whether ratification occurred and support your analysis with relevant case law.
Relevant Authority: Ratification
Case Law: General principles of agency by ratification (no specific case in Lecture 6, but applicable in principle)
