bus5 ch. 36

An agent hired to manage a business makes contracts that are reasonably necessary for conducting the business or that are customary in the business. This refers to:

implied authority.

When an agent contracts for a legally existing and competent principal while lacking authority to do so, he is bound to the contract on the theory of ___

implied warranty

An agent who makes misrepresentations while conducting the principal's business is not liable in tort unless he either knew or had reason to know their falsity.

true

Which of the following is true of contracts made by subagents?

Both the principal and the agent probably can ratify the contracts of subagents.

Which of the following theories might allow a third party to recover when the third party has justifiably changed their position in reliance on an agent's assertions, but the agent lacks actual or apparent authority?

Estoppel

____ binds the principal as if the agent had possessed authority at the time of entering a contract.

Ratification

Julie gives her agent improper or unclear instructions, and fails to make and enforce appropriate regulations to govern her agent's conduct. Julie likely will be held to be liable for actions undertaken by her agent under:

direct liability.

If an agent is joining the principal as an obligor on the contract, the agent is:

expressly binding herself to the contract.

A third party cannot hold an agent liable on contracts made for an undisclosed principal.

false

Implied authority is actual authority that the principal has specified in very specific or detailed language.

false

Respondeat superior means let the employee answer.

false

Another name for an independent contractor is ____

nonemployee agents

Apparent authority arises when

the principal's manifestations cause a third party to form a reasonable belief that the agent is authorized to act in a certain way.

A principal's power to ratify is cut off when:

the third party withdraws from the contract.

A principal is directly liable for misrepresentations made by her agent during authorized transactions if she intended that the agent make the misrepresentations.

true

An agent is not liable for making an unauthorized contract if the third party actually knows that the agent lacks authority.

true

When an agency relationship is formed, but third parties lack knowledge of the principal's existence and identity, the principal is ______

undisclosed

When a third party knows or has reason to know that the agent is acting for a principal but lacks knowledge or reason to know the principal's identity, the principal is ____

unidentified