Chapter 16 - BLAW

Notary public

A public official authorized to attest to the authenticity of signatures

Agency

A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal)

Power of attorney

A written document, which is usually notarized, authorizing another to act as one's agent; can be special (permitting the agent to do specified acts only) or general (permitting the agent to transact all business for the principal)

Delia gives her agent, Mike, money to buy a commercial oven. Mike takes the cash and deposits it into his personal checking account and then accidentally spends some of it. Mike has violated his duty of

Accounting

Which is not one of the four ways in which an agency relationship can arise?

Agency by federal law

With respect to their employers, employees who deal with third parties are generally deemed to be

Agents

Fiduciary

As a noun, a person having a duty created by his or her undertaking to act primarily for another's benefit in matters connected with the undertaking. As an adjective, a relationship founded on trust and confidence.

Express authority

Authority expressly given by one party to another. In agency law, an agent has express authority to act for a principal if both parties agree, orally or in writing, that an agency relationship exists in which the agent had the power at act in the place of, and on behalf of, the principal

Implied authority

Authority that is created not by an explicit oral or written agreement but by implication. In agency law, implied authority can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority

Apparent authority

Authority that is only apparent, not real. In agency law, a person may be deemed to have had the power to act as an agent for another party if the other party's manifestations to a third party let the third party to believe that an agency existed when, in fact, it did not

Highlight the typical duties that the principal has to the agent. Compensation Eventual promotion Reimbursement and indemnification Living wage Cooperation Partial ownership in business

Compensation Reimbursement and indemnification Cooperation

Federal statuses governing employment __________ apply only when an employer-employee relationship exists. Liability Discrimination Obligations Payment Responsible

Discrimination

Elia and Sonia ask Fay to be the administrator of their will and the guardian of their children if they pass away. Fay agrees. Fiduciary relationships such as this one do not involve a high degree of trust or confidence. T/F

False

Generally, agency agreements must be in writing and there must be consideration. T/F

False

The principal-agent relationship is fiduciary and therefore not based on trust, but specific laws. T/F

False

Equal dignity rule

In most states, a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is also required to be in writing

Kip owns Kip's Construction. He agrees to renovate Simha's bathroom. Kip is likely to be classified as an

Independent contractor

Whether a worker is an employee or an independent contractor can affect the employer's _______ for worker's actions. Liability Discrimination Obligations Payment Responsible

Liability

Independent Contractor

One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. An independent contractor is not an employee but may be an agent.

Louisa is moving from NY to LA. Grover agrees to act as her agent to sell her NY apartment. As her agent, Grover owes Louisa all of the following duties EXCEPT:

Payment

Highlight the five duties the agent owes the principal. 40 hours of work a week Performance Superior competence Notification Loyalty Obedience Accounting Good health

Performance Notification Loyalty Obedience Accounting

The degree of skill or care required of an agent is usually that expected of a __________ person under similar circumstances.

Reasonable

If the Internal Revenue Service decides that an employee is misclassified as an independent contractor, the employer will be _________ for paying social Security, withholding, and unemployment taxes. Liability Discrimination Obligations Payment Responsible

Responsible

Ratification

The act of accepting and giving legal force to an obligation that previously was not enforceable

You walk into a restaurant and check your coat to a person being a counter. You see a sign that says "I work for tips." What can you assume the relationship is between the owner of the restaurant and the person who took your coat?

There is an implied agreement that the coat check person is an agent of the restaurant

Agency relationships are normally consensual, coming about through voluntary consent and agreement between the parties. T/F

True

An agency by estoppel arises when the principal's actions have created the appearance of an agency that does not in fact exist. T/F

True

An agent's implied authority can be inferred by custom. T/F

True

In an agency relationship involving two parties, the agent agrees to represent or act for the principal. T/F

True

The principal has a duty to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions. T/F

True

Any copyrighted work created by an employee within the scope of her or his employment at the request of the employer is called a ____________

Work for hire

An ordinary power of attorney ends when

a person giving the power dies or becomes incapacitated

Napoleon owns Napoleon's Construction. He agrees to renovate Mrs. Cernan's bathroom. According to IRS criteria, Napoleon is likely to be classified as a. An independent contractor b. A disclosed principal c. An employee d. A partially disclosed principal

a. An independent contractor

How the Courts Determine Employee or Independent Contractor Status

a. How much control does the employer exercise over the details of the work? b. Is the worker engaged in an occupation or business distinct from that of the employer? c. Is the work usually done under the employer's direction or by a specialist without supervision? d. Does the employer supply the tools at the place of work? e. For how long is the person employed? f. What is the method of payment - by time period or at the completion of the job? g. What degree of skill is required of the worker?

Requirements for Ratification

a. The agent must have acted on behalf of an identified principal who subsequently ratifies the action b. The principal must know all of the material facts involved in the transaction c. The principal must affirm the agent's act in its entirety d. The principal must have the legal capacity to authorize the transaction at the time the agent engages in the act and at the time the principal ratifies e. The principal's affirmation (ratification) must occur before the third party withdraws from the transaction f. The principal must observe the same formalities when ratifying the act as would have been required to authorize it initally

Kris represents Josh in the sale of his house as his real estate agent. Kris is entitled to a. compensation b. loyalty c. full disclosure d. confidentiality

a. compensation

A familiar example of an agent is a(n): a. corporate officer who serves in a representative capacity for the owners of the corporation b. gardener hired to maintain the grounds at a large industrial complex c. janitorial employee who does not deal with third parties

a. corporate officer who serves in a representative capacity for the owners of the corporation

Eli and Marilyn ask Gracie to be the administrator of their will and the guardian of their children if they pass away before their children reach the age of majority. Gracie agrees. Fiduciary relationships such as this one a. involve a high degree of trust and confidence b. are legal only between family members c. typically exist only between employees in government agencies d. allow the parties to legally avoid their obligations to one another

a. involve a high degree of trust and confidence

Selena signs a power of attorney appointing Kim only for the purpose of signing on her behalf relating to the sale of her house. The power of attorney will terminate based on a. the purpose being achieved b. a lapse of time c. mutual agreement between Selena and Kim d. termination by either Selena or Kim

a. the purpose being achieved

When a third party reasonably believes a person has authority to act on another's behalf, even if that person doesn't have such authority, the situation is known as

apparent authority

Maureen knows that her friend Kramer collects duck memorabilia. One day, she spots a carved wooden duck she is sure he will love. She tells the shop owner that Kramer will pay her for the duck as soon as he sees it, and she takes the duck with her to show it to Kramer. Kramer is a. Liable under the doctrine of apparent authority b. Not liable c. Liable only if the shop owner knew that Maureen was not Kramer's agent d. Fully liable under the doctrine of intelligent agents

b. Not liable

Jason instructs his agent Miguel to obtain a piece of artwork from Martina by threatening to beat her if she refuses to sell the artwork. Miguel follows Jason's instruction and beats Martina when she refuses to sell the item. In this situation, a. Miguel alone is liable for Martina's injuries b. Both Jason and Miguel are liable for Martina's injuries c. Martina cannot recover damages for her injuries in court because Miguel was acting as an agent d. Miguel can seek an indemnification against Jason

b. both Jason and Miguel are liable for Martina's injuries

Under the equal dignity rule: a. contracts creating agency relationships are voidable by agents b. if a contract must be in writing to be executed, an agent's authority must also be in writing c. if a contract between a principal and an agent lasts for longer than one year, it must be in writing

b. if a contract must be in writing to be executed, an agent's authority must also be in writing

Sam goes out shopping, and using his wife Juanita's credit card, he buys $221.00 worth of groceries. Under agency law, Juanita will probably be deemed a. liable for the purchase, based on the doctrine of respondent superior b. liable for the purchase, based on the creation of an agency by operation of law c. not liable for the purchase, based on Sam's duty of performance d. not liable for the purchase, based on Sam's lack of a power or attorney

b. liable for the purchase, based on the creation of an agency by operation of law

An agent's authority to act for a principal: a. can be expressed only b. may be actual or apparent c. must always be in writing

b. may be actual or apparent

Sarah has to move from the East Coast to the West Coast for her job. Elmo agrees to act as Sarah's agent to sell her New York condo. As her agent, Elmo owes Sarah all of the following duties except a. loyalty b. payment c. performance d. notification

b. payment

In agency law, ratification occurs when: a. there is no agency relationship, but the words and actions of the principal lead a third party to assume that an agency exists b. fiduciary obligations are owed by an agent to a principal c. the principal, by words or by actions, affirms a contract made by a person who in fact is not an agent d. the obligation of an agent who acted outside the scope of his or her authority is rejected

c. a principal, by words or by actions, affirms a contract made by a person who in fact is not an agent

Dara gives her agent, Marla, money to purchase a new commercial oven. Marla takes the money and deposits it into her personal checking account. Marla then accidentally spends some of Darla's money. Marla has violated his duty of a. loyalty b. payment c. accounting d. cooperation

c. accounting

Whitney works at home making unique children's clothes. Liam buys Whitney's clothes to sell in his store. With respect to Whitney's legal relationship to Liam, she is probably a. an employee b. a principal c. an independent contractor d. an agent by operation of law

c. an independent contractor

Sarah asks Sergio to mow her law. Sergio, who is overloaded with work, contracts with Dan to do the work for him as an independent contractor. As Dan is mowing, Sarah walks out of her house and the lawnmower throws a rock and hits Sarah, causing serious injuries. In this situation, Sergio is a. liable for Sarah's harms because he has a responsibility to control the actions of his employees b. liable for Sarah's harms because Dan is an independent contractor c. probably not liable for Sarah's inuries

c. probably not liable for Sarah's injuries

Selma, an elderly widow, gives her young neighbor, Steven, written power of attorney. This means that Steven now a. Has implied authority, but not express authority, to act as Selma's agent b. Is an undisclosed principal c. Is a disclosed principal d. Has express authority to act as Selma's agent

d. Has express authority to act as Selma's agent

Gina buys a piece of pottery from Woodward for her principal, Kelvin. If Woodward knows that Gina is buying the pottery on behalf of someone other than herself but does not know the identity of that person, Kelvin is a. an independent contractor working for gina b. an agent for Woodward c. an undisclosed principal d. a partially disclosed principal

d. a partially disclosed principal

Charlie tells Jamal that Marisol has agreed to allow him to sell her racing bicycle. Marisol is present at the time, hears the conversation, and says nothing. Jamal wants to buy a bicycle like Marisol's, so he agrees with Charlie to buy Marisol's bike. Marisol then refuses to sell the bicycle. Marisol claims that she is not bound by the agreement formed by Charlie and Jamal because Charlie is not her agent. Marisol is a. not bound by the contract because she did not have an agency agreement with Charlie b. not bound by the contract because of a rescission c. bound by the contract, under a theory of agency by operation of law d. bound by the contract, under a theory of agency by estoppel

d. bound by the contract, under a theory of agency by estoppel

Clarence buys $221 worth of groceries using his wife's credit card. Under agency law, his wife will probably be deemed:

liable for the purchase, based on the creation of an agency by operation of law