BLAW ch. 35
Identify the TWO duties of agents to avoid conflict of interest with their principals, a(n) ____________ and a(n) _____________.
An agent may not deal with himself. An agent may not act on behalf of a principal's competing party.
______________ arises when a principal's manifestations cause a third party to believe reasonably that an agent is authorized to act in a certain way.
Apparent authority
Identify the TWO main forms of authority under the law of agency: __________ and _________.
actual authority apparent authority
A two-party relationship in which one party has the power to act on behalf of, and under the control of, the other party is termed a(n)_______________.
agency
Identify the TWO improper material benefits listed under the agency law: _________ and __________.
gifts from parties with whom the agent deals on the principal's behalf kick backs
A principal's most important duties to her agent include all of the following: _____.
indemnification reimbursement compensation
Which ONE of the following is a general duty of agents as stated in the Restatement (Third) they should _____________.
refrain from making offensive statements to customers.
Terminating an agency by act of a principal or an agent at the option of either party is called _____ when done by the principal and _____, when done by the agent.
revocation
Agency law's most important social function is to ____________.
stimulate commercial activity
When an agent breaches her fiduciary duty, the principal has the legal right to ____________.
terminate the agency and recover damages from the agent
When compensation is due to an agent by the principal but its amount is not expressly stated, the amount is _____________.
the market price or customary price of the agent's service
Apparent authority of an agent ends when ______________.
the third party dealing with the principal receives an appropriate notice of the termination
Confidential information of a principal can be used or communicated by agents only if ______________.
their principals agree it
A principal is not required to indemnify her agent for _______________.
unauthorized acts
In contrast to implied authority, express authority is the authority that a principal ___________.
manifests to an agent in very specific language
Agents can accept certain ___________ from their clients with the _________ of the principal.
material benefits consent
Agents can avoid conflicts of interest with their principals by _____________.
not acquiring material benefits from a client
An agent's duty requires that she ______________.
not deal with the principal's property so that it appears to be the agent's
Finally, an agent who is authorized to make a certain transaction may not act on behalf of the other party to the transaction unless the: _______________.
principal knowingly consents
Identify TWO true statements about the termination of an agency by act of parties: ____________ and ____________.
Termination by act of the parties occurs by the mutual agreement of a principal and an agent. Termination by act of the parties occurs upon the happening of an event stated in an agreement.
An agency power ____________ for a duty owed by the principal is an exception to the termination of an agency by act of its parties or operation by the law.
given as security
Identify TWO exceptions to the duty of an agent to obey instructions offered by a principal: _____________ and _____________.
gratuitous agents need not obey their principal's order to continue to act as agents. agents need not follow directions by a principal to misrepresent the quality of the principal's goods or services.
ONE of the following is true about the duties of an agent under the law of agency, agents _____________.
have the duty of confidentiality of information to their principal.
Choose THREE of the following situations when an agent cannot use confidential information of a principal ___________, ___________, and _____________.
information about manufacturing methods information about the contract bids information about technological discoveries
Unless the principal agrees otherwise, an agent ___________ with the principal regarding the agency business and ____________ so long as he remains an agent.
may not compete may not assist the principal's competitors
Identify the TWO true statements about an agent's duty of holding the principal's property: an agent ______________ and an agent _____________
must disclose all records and accounts to the principal when demanded. must keep accurate records and accounts of all transactions of the principal.
Agency law implies a promise by a principal to indemnify an agent for ____________.
payments made on the principal's behalf
In an agency contract, a person has the capacity to be a(n) __________ if that person has capacity to do the acts for which an agent has been retained.
principal
Certain duties or acts must be performed personally by a(n) __________ and cannot be delegated to a(n) __________.
principal, agent
Identify all the cases in which a principal is not required to compensate an agent: for ____________, for ____________, and for ____________.
services that involve the unauthorized hiring of subagents unauthorized tasks that are undertaken without pay services to which the principal does not consent
Identify the agents appointed by actual authority: ____________ and _____________
Jack is given a job at New Fort Inn as a receptionist by its owner. Maria works as a sales executive for Travel Free Pvt Ltd.
An actual notification about the termination of an agency can be accomplished by ____________.
a direct personal statement to third parties
Termination of an agency by operation of law is applicable if _____________.
a principal or an agent dies
An agency can be terminated by the act of a principal or an agent when _____________.
a specified result for which the agency was created has been accomplished
Identify the TWO parties directly involved in an agency contract: the ___________ and the ____________.
agent principal
ONE duty of an agent under the agency law is that a(n) ___________.
agent must avoid conflicts of interest with a principal.
Identify ONE true statement about the formation of an agency: _______________.
an agency is formed through an oral or written consent between two parties.
One feature of an agency coupled with an interest is that: ____________.
an agent has an interest in the subject matter of an agency that is distinct from the principal's interest.
Former agents can use their ____________ authority to bind their principals even after the agency has been terminated.
apparent
Unlike special agents, general agents ____________.
are continuously employed
A gratuitous agency is terminable _______________.
by either party without liability
ONE true statement about apparent authority under the agency law is that it: ____________.
can be communicated by a principal either directly or through an agent.
A power given as a security or agency coupled with an interest is important because it ____________.
cannot be terminated by the principal's revocation
In a situation where a principal's instructions are ambiguous, an agent is expected to ____________.
communicate with the principal to clarify the instructions
An agent who is compensated must act with which THREE of the following duties?
competence diligence care
In the context of creation of an agency, identify ONE true statement about capacity: _______________.
corporations have the capacity to appoint agents.
Paid ________ who represent that they possess a higher than _________ level of skill may be held to a correspondingly higher standard of performance.
customary agents
Identify ONE true statement about the nondelegable obligations under the agency law: ______________.
delegation of authority is not possible in contracts that demand the personal performance of a principal.
Identify ONE true statement about agency law, it: ____________.
enables businesses to increase the number of transactions completed within a given time.
Agency is a fiduciary relationship because a principal ____________.
entrusts an agent with power to make contracts for the principal
An agent has a(n) ____________ duty to act loyally for the principal's benefit in all matters connected with the agency relationship.
fiduciary
Revocation or renunciation occurs when ______________.
v\either party manifests to the other that he or she does not wish the agency to continue
The following TWO answers are true about termination of an agency by operation of law an _____________ and an _______________.
An agency can be terminated by the principal's loss of capacity. An agency can be terminated by the suspension of power of an agent or a principal that is not an individual.
ONE general duty of agents that is included in the Restatement (Third) is to: ______________.
act reasonably and refrain from conduct that is likely to damage a principal's enterprise
Daniel enters into a contract with High Volt International for selling its products for two years. High Volt International franchises its business to Daniel by its __________ authority.
actual
