Unit 1

Question 1

The agent is a ______ of the ____ and not vice versa.

Answer 1

fiduciary, principle 953

Question 2

actual authority

Answer 2

authority to act must be communicated to the agent 954

Question 3

apparent authority

Answer 3

authority to act must be communicated to the third party in some way by the principle 955

Question 4

actual authority comes in 2 forms:

Answer 4

express and implied authority 954

Question 5

express authority

Answer 5

actual authority that the principle has manifested to the agent in very specific or detailed language 954

Question 6

implied authority

Answer 6

agent generally has implied authority to act in a way the agent reasonably believes the principle wants him to act 954

Question 7

a ________ is continuously employed to conduct a series of transactions for the principle.

Answer 7

general agent 955

Question 8

a ________ is employed to conduct a single transaction or a small, simple group of transactions.

Answer 8

special agent 955

Question 9

an agent who receives no compensation for his services is called a _________.

Answer 9

gratuitous agent 956

Question 10

a ______ is a person appointed by an agent to perform tasks that the agent has undertaken to perform for his principle.

Answer 10

subagent 956

Question 11

an agent has a _________ to act loyally for the principal’s benefit in all matters connected with the agency relationship.

Answer 11

fiduciary duty 958

Question 12

agent’s duty of loyalty (2 duties)

Answer 12

1. avoiding conflicts of interest with the principle

2. not disclosing confidential information received from the principle 958

Question 13

the duty __________ continues after the agency ends.

Answer 13

not to use or disclose confidential information 958

Question 14

a paid agent must act with (3 things)

Answer 14

care, competence, and diligence 960

Question 15

body of law governing agency’s

Answer 15

The Restatement (third)

Question 16

an agent who obtains or holds property for the principal usually may not ___________.

Answer 16

commingle that property with her own property. 960

Question 17

ordinarily, a principle must suffer _______ to be entitled to any recovery from the agent.

Answer 17

monetary damages 961

Question 18

Three main duties a principal owes to an agent:

Answer 18

1. compensate
2. reimburse the agent for money spent in the principal’s service.
3. indemnify the agent for losses suffered in conducting the principal’s business. 962

Question 19

Termination of an Agency occurs by two possible methods:

Answer 19

1. termination by act of the parties

2. termination by operation of law 963

Question 20

an agent ends an agency by _____ while a principal ends an agency by _____.

Answer 20

renunciation, revocation 964

Question 21

a gratuitous agent _____ liable for renunciation while a normal agent _______ liable

Answer 21

is not, may be 964

Question 22

a former agent may be able to bind the principal under his ______ even though the agency has ended.

Answer 22

apparent authority 965.

Question 23

_________ ends only when the third party receives appropriate notice of the termination.

Answer 23

apparent authority 965

Question 24

apparent authority (2 elements)

Answer 24

1. manifestations by the principal to the third party

2. that cause the third party to believe reasonably that the agent has such authority 972

Question 25

a principal may be liable for an agent’s transaction with a third party who justifiably is induced to make a detrimental change in position because he believed the actor had authority to act for the person. This is called _____

Answer 25

estoppel 974

Question 26

2 elements of estoppel:

Answer 26

1. intentional or carelessly cause the third party’s belief, or
2. having notice that such belief might cause a third party to change his position, fail to take reasonable steps to notify the third person of the facts. 974

Question 27

A principal is disclosed if…

Answer 27

the third party knows or has reason to know that the agent acts for a principal and the principal’s identity. 976

Question 28

an agent who represents a disclosed principal is _____ on authorized contracts made for such a principal.

Answer 28

not liable 976

Question 29

a principal is unidentified if……

Answer 29

the third party knows or has reason to know that the agent is acting for a principal but lacks knowledge of the principals identity. 976

Question 30

an agent who represents an unidentified principal ______ on contracts unless the agent and third party agree otherwise.

Answer 30

is liable 976

Question 31

a principal is undisclosed when …..

Answer 31

the third party lacks knowledge or reason to know both the principal’s existence and the principal’s identity. 976

Question 32

under the __________ a principal who is an employer, is liable for torts committed by agents.

Answer 32

respondeat doctrine 980

Question 33

2 elements of respondeat doctrine:

Answer 33

1. agent is employee of principal

2. agent acted within the scope of their employment. 980

Question 34

2 forms of tort liability for the principal:

Answer 34

1. Vicarious liability (including respondeat doctrine)

2. direct liability 980

Question 35

a principal is ordinarily not liable for torts committed by

Answer 35

non-employee agents 982

Question 36

a principal is _______ for misrepresentations made by her agent during authorized transaction if the principal ….

Answer 36

directly liable, intended the agent to make the misrepresentation. 983