Leson 12,13,14,15 Types of Agency relationships

Question 1

In general, the power of attorney may:

Answer 1

-limit authority to specific transactions

Question 2

How is apparent authority created?

Answer 2

-By perceptions of third parties that have been created or allowed by the principal

Question 3

A principal and agent relationship requires

Answer 3

Meeting of the minds and consent to act.

Question 4

What is an express agency relationship?

Answer 4

An express agency relationship is one in which the principal orally or in writing delegates authority to another.

Question 5

What implied authority goes with express authority?

Answer 5

The agent has whatever authority is customary for his or her position—whatever authority can be implied because of the position.

Question 6

A writing or record is not generally required for a valid agency relationship, except when?

Answer 6

1. The contract the agent is authorized to enter into must be in writing under the Statute of Frauds, such as a real estate contract.
2. The agency relationship cannot reasonably be completed within one year.

Question 7

Who has the capacity to enter into an agency relationship?

Answer 7

individual or an entity (government or corporation)

Question 8

What is Lingering Apparent Agency

Answer 8

A type of agency that exists when the principal fires an agent (ends the actual or express agreement), but the agent continues to act as an employee.

Question 9

What is Creation of an Agency Relationship by Ratification?

Answer 9

1. In this situation, the agent does not have express, implied, or apparent authority, but he or she enters into a contract on behalf of an assumed principal. The principal is not bound, but ratification gives the principal a choice.
2. If another enters into a contract for you without authority, you, as the principal, can choose to be bound by the agreement.

Question 10

Does the principal need to reimburse reasonable expenses of the agent?

Answer 10

Yes-Absent contrary agreement, the principal is responsible for expenses the agent incurs in reasonably performing his or her activities on the principal’s behalf.

Question 11

What events cause termination by Operation of Law of the principal agent relationship?

Answer 11

1. Termination by death of either principal or agent
2. Termination by insanity of the principal
3. Termination by bankruptcy
4. Termination by change of law—if the law makes the conduct of the agent or the subject matter of the contract illegal, the agency relationship ends.
5. Termination by circumstances such as loss or destruction of subject matter—The loss or destruction of the property that is the subject matter of the agency relationship terminates the agency relationship.

Question 12

Termination by operation of law ends ALL authority: express, implied, and apparent, True or False

Answer 12

True

Question 13

How can the Agency Relationship be terminated?

Answer 13

1. Termination by fulfillment
2. Termination by lapse of time
3. Termination by a specified event
4. Termination by mutual agreement
5. Termination by unilateral act of one party—(“You’re fired” or “I quit”)—

Question 14

once the third party learns the identity of an undisclosed principal, the third party may elect to hold either the agent or the principal liable on the contract. True or False

Answer 14

True

Question 15

If the principal is unknown to the third party, apparent authority cannot exist. True or False

Answer 15

True

Question 16

Who is liable when their is a Disclosed Principal with Actual Authority (Express or Implied)?

Answer 16

In this situation, the principal only is liable to the third party.

Question 17

Who is liable when their is a Disclosed Principal with Apparent Authority?

Answer 17

In this situation, the principal only is liable to the third party, but the agent is also liable to the principal for acting as an agent without express or implied authority.

Question 18

Who is liable when there is a Disclosed Principal—Agent has no Actual or Apparent Authority

Answer 18

the agent only is liable to the third party; the principal has NO liability.

Question 19

What is the Contract Liability of Partially Disclosed, and Undisclosed Principals under Actual Authority

Answer 19

both the principal and the agent are liable to the third party.

Question 20

Does the Third party have the right to escape the contract if an undisclosed principal is revealed?

Answer 20

There is no right to escape the contractual duties if the principal is ultimately revealed