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Exam 14: Agency Relationships

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Question 1

Multiple Choice

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Larry is an agent for Mary.She gives him clear instructions to enter into contracts on her behalf only on Mondays,Wednesdays,or Fridays.He enters into a contract on her behalf on Tuesday.Larry has breached

A) no duty.
B) the duty of loyalty.
C) the duty of performance.
D) the duty of obedience.

E) None of the above
F) All of the above

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Question 2

Multiple Choice

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Emmett,an agent for Fridley,signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax.The government prosecutes Fridley for failing to pay the tax.He is

A) liable,because notice to Emmett is notice to Fridley.
B) liable,because notice to Glover is notice to Fridley.
C) not liable,because Emmett did not notify Fridley of the tax.
D) not liable,because Glover did not tell Fridley about the tax.

E) None of the above
F) B) and C)

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Question 3

True/False

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When an agent,acting within the scope of his or her authority,contracts with a third party,a disclosed principal is liable to the third party.

Vera is a purchasing agent for Wild-Caught Fish Inc. ,with the authority to buy a sea fisher's catch up to a certain quantity.After the fish is bought,the agency relationship terminates

Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects.Fred secretly buys some of the property and sells it to Energy at a profit.Fred has breached

A property owner who hires a realtor to sell the property thereby enters into an agency relationship with an employee for a limited time.

Roman is the chief executive officer of Salty Snax Corporation.Roman's responsibilities include decisions on product development,marketing,and other significant business directions.Roman is subject to the approval and oversight of Salty Snax's board of directors.Teri is a Salty Snax manager whose duties include the firm's day-to-day hiring,firing,purchasing,and selling.Umberto is a Salty Snax salesperson,whose daily activities are controlled by Teri.Velma writes sales manuals and promotional materials for Salty Snax's products according to Roman's instructions and subject to Salty Snax's control,but has no dealings with the company's customers or suppliers.Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax's control.Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?

An undisclosed principal is one whose identity is totally unknown by an agent and a third party at the time a contract is made.

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

If an agent has represented himself or herself as possessing special skills,the agent is expected to use them.

Ray is a delivery driver for Sicilian Pasta Company.Ray does exactly what the company tells him.Ray is

Erin indicates that she is acting as an agent on behalf of an unidentified client-Flight Services Inc.-when she enters into a contract with Go Airlines.Liability to Go for nonperformance of the contract may be imposed on

The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent.

Without authorization,Lars contracts on behalf of Mina to have Nemo paint Mina's Boutique.If Mina decides to ratify the contract,she must affirm

An agent must keep confidential any information acquired through an agency during the term of the relationship,but can disclose it after the agency ends.

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

Agency relationships come about by voluntary consent and agreement of the parties-consideration is required,and the agreement must be in writing.

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm.Jon makes a deal with Lila for the sheep,but neither Jon nor Kino pays the price.Lila sues Jon for breach.Jon's right to hold Kino liable for any damages is the right to

Motor Parts Sales Inc.hires Nolly to work on its shipping dock,accepting deliveries,and dispatching trucks,and dealing with customers and drivers.With respect to Motor Parts,Nolly is most likely

Both parties to an agency relationship have the power and the right to terminate the relationship at any time.