Agency

1. Ted is an employee of Wonderful Company. Ted's duties include making deliveries to Wonderful's customers. If Ted should accidentally run a stop light while making deliveries and harm a third person then under the doctrine of "respondeat superior":

Wonderful Company is liable to the third person for Ted's negligence

1. A "power of attorney" results in the creation of an agency relationship in which of the following forms:

express authority

1. Agency is a ________________ relationship where the _________________ consents that the _____________acts on behalf of the principal and is subject to the principal's control.

fiduciary, principal, agent

1. In which of the following would an office assistant (employee) be in the "course and scope" of employment, thus making the employer liable for a tort committed by the employee?

Delivering materials to a customer upon request of the employer even though this was not a normal act

1. Which of the following types of authority could an agent have which would bind a principal to a contract?

Express, implied and apparent

1. Apparent authority is based on the "illusion of authority" which results in the principal being held liable as if an agency relationship had been created. In order for this to be the case the illusion of authority

Must be the result of some act of the principal

1. Bonnie is a receptionist at a local law firm. She works 9 AM to 5 PM. Her job duties require her to answer the phones, make copies, greet clients, etc. In addition Bonnie must pick up the mail from the post office every morning at 10 AM and take the outgoing mail back to the post office every afternoon at 3 PM. One day Bonnie gets into a car accident while going to pick up the law firm's mail. The injured party wants to sue the law firm for Bonnie's negligence. Which of the following is true?

The law firm is likely liable for Bonnie's negligence because the accident occurred while Bonnie was acting in the course and scope of her employment

1. Ben Bradley is the sole owner of "BB Golf Corporation, Inc." He purchased $20,000 of office equipment on credit from an out of state business, signing his own name to the sales agreement. The out of state seller was unaware of the existence of "BB Golf Corporation." Not long after the equipment was delivered BB Golf Corporation ran out of money and was unable to pay the debt to the seller. Which party or parties could be held legally responsible liable to the seller for the debt?

Both BB Golf and Ben Bradley are legally responsible

1. Alex wanted to buy a piece of land that he could use to construct an office building. He asked his real estate agent (Frances) to make a contract on his behalf with a third party who was interested in selling a piece of land in the area. Alex told Frances not to mention that he (Alex) was the person who would be buying the land. Frances did this, and in due course a contract for the sale of the land was executed. Some time later Alex decided that he did not want to buy the land after all. The owner of the land wants to sue all responsible parties for "breach of contract." Which party or parties could be held responsible to the owner of the land?

I. Alex II. Frances

1. Magic Carpet, Co. hired Chad to install carpet in its customer's homes. Chad installed carpet in in a customer's home, but did the job in such a negligent manner that the customer's walls and baseboards were damaged. The customer wants to file suit against both Magic Company and Chad. In order to find Magic Carpet Co. liable for the acts of Chad, the plaintiff (customer) must be able to prove that:

I. Chad was subject to the direct control of Magic II. Chad was in the course and scope of his employment with Magic

1. An agent can be held liable for a contract made on behalf of a principal if __________?

I. No disclosure of principal I. Partial Disclosure of Principal

1. Which of the following is a characteristic of an "employee" and NOT of an "independent contractor"?

I. Usually receives employment benefits and health insurance. II. Covered by minimum wage and overtime. III. Covered by employment discrimination laws.

1. Allen has been performing professional services for Barbara over the past six months. Due to an accident caused by Allen a question has arisen as to whether Allen is an employee of Barbara or instead is an independent contractor. Which of the following is generally the most important factor which will determine whether or not Allen is an independent contractor?

Is he subject to the direct control of Barbara?

1. Les was just hired as manager of Holiday Inn (a hotel). Les was given no express duties, but was told to "run the hotel to the best of your ability." In the normal course of business managers hire and fire employees. Les hired Pat as a desk clerk at minimum wage. Which of the following is true?

Les had implied authority to make an employment contract on behalf of Holiday Inn

1. Mark wants to start a business which relies on workers to perform several duties. Mark does not want to be liable for torts of these workers. How should Mark proceed?

Mark should not directly control how the workers perform their duties so that the doctrine of respondeat superior would not apply

1. Frank is the sole owner of a small business the name of which is "Arkansas Sporting Goods." The business is incorporated under the name "Arkansas Sporting Goods, Inc." but the only name on the outside of the building is Arkansas Sporting Goods. If a third party vendor (seller) sells inventory to the business and the contract is signed by Frank personally, under these facts what legal principle could Frank be held personally liable for the debt?

No disclosure given by Frank to the vendor

1. While driving to her job as a salesclerk with American Eagle (a clothing store) Sara drives her car negligently and causes an accident, severely injuring another driver. Is American Eagle liable for the damages to the other driver?

No, because Sara's drive to work is not in the course and scope of employment

1. Oprah, a famously wealthy person, wants to buy a ranch in West Texas. Oprah thinks the seller will inflate the price if the seller learns that Oprah wants to buy the ranch. Therefore, Oprah instructs her real estate agent not to disclose the buyer's identity. The agent obeys these instructions and finds a seller, who agrees to sell the property for a reasonable price to the unidentified buyer. If there is a breach of contract to buy the property, who can the seller hold liable?

Oprah and/or the real estate agent

1. Susan, a private investigator, is performing a service for Allen. In a tort lawsuit, a question has arisen as to whether Susan is classified as a "servant" of Allen or an "independent contractor." Which of the following would be the most likely to result in Susan being classified as an "independent contractor?"

Personally determines the procedures she will follow in completing the job

1. One way to create an agency relationship that provides an agent with express authority is through which of the following written documents?

Power of Attorney

1. A principal may give an agent express authority in which written document?

Power of attorney

1. Sean Smith, the owner and president of Fayetteville Pool Corporation, entered into a contract with Katrina Kash to build a pool and pool house in her back yard. When Sean Smith signed the contract with Katrina he signed it: Sean Smith and did not tell Katrina that he was signing on behalf of Fayetteville Pool Corporation. After the pool was built, Katrina discovered that the electricity was not working properly and anyone who enters the pool receives a shock. Katrina wants to sue Sean Smith in his individual name for breach of contract, but Sean says that he has no individual liability under the contract because his business is incorporated. What will a court likely hold?

Sean is liable because he did not disclose that he was an agent for Fayetteville Pool Corporation

1. Without telling his friend Keisha, Bob made a contract on her behalf with a third party. When Bob told Keisha what he had done she happily approved the contract because it was very beneficial to her. Is this contract binding on Keisha? A. Yes because of implied authority.

Yes, because of ratification

1. Tammy works for Office Equipment Company as an accountant. Her sole authority is to maintain the accounting records of the company. One day when she is the only one in the office a salesperson comes in and tries to sell Office Equipment Company new furniture. Even though she has no authority to purchase furniture for the Office Equipment Company she does so anyway, believing that the furniture is "super cool" and a "great deal." When the owner of Office Equipment Company returns Tammy tells him about the contract that she made in his absence. The owner was very impressed and thanked her for taking the initiative to make the contract to purchase the furniture. He also contacted the salesperson and told him that he was very excited to purchase the furniture. At this moment in time is the contract to buy the furniture binding on Office Equipment Company?

Yes, under the doctrine of ratification.

1. Hannah allowed her friend Carol to borrow her laptop computer for a weekend. During that time Carol (without permission from Hannah) sold the laptop to a friend. The next day Carol met with Hannah and told her that she had sold the laptop because "the price was too good to pass up." She gave the money to Hannah, who agreed that the price was outstanding and that she was ecstatic that the laptop was sold. Based on these facts is the contract for the sale of the laptop valid against Hannah?

Yes, under the ratification doctrine