BLAW Chapter 19 AGENCY LAW 1

Amber, who is an agent for Peter, breaches her fiduciary duty to Peter. Amber:

All of these are correct.

An agent has breached his fiduciary duty to the principal in which of the following situations?

All of these.

In circumstances under which a person is held liable as a principal even though no actual agency has been created, there is a(n):

All of these.

A principal has no duty to compensate his or her agent if:

All these are correct.

According to the Second Restatement, in which of the following situations would an agency be terminated by operation of law?

An outbreak of war places the principal and agent in the position of alien enemies.

A person who engages an independent contractor may control the method and manner used by the contractor to perform the job.

False

A plumber hired to redo the plumbing in a building is an independent contractor and agent of the owner of the building.

False

According to the Restatement, whether an agency relationship has been created is determined by using a subjective test.

False

Agency relationships are governed primarily by federal statute.

False

Agents and principals have mutual fiduciary duties to one another.

False

All independent contractors are agents, but not all agents are independent contractors.

False

An agency contract appointing the agent for a period of more than one year does not have to be in writing.

False

An agent can never act for two principals.

False

An agent, acting within the scope of authority granted by the principal, may bind the principal to contracts, but may not negotiate the terms of the contracts.

False

Edward writes to Judy, who is in the business of purchasing goods for others, telling her to purchase certain goods and ship them to him. Before answering Edward's letter, Judy does as directed and charges the goods to Edward. Judy was not authorized to do this because an agency relationship did not yet exist between Edward and Judy.

False

If an agent receives a gift from a third person with whom he is dealing on behalf of the principal, he can keep it without notifying the principal.

False

Jones, an agent of Rossi, is authorized to sell Rossi's ownership of wheat on the commodities market on Monday. On Monday, however, the market opens with the lowest prices for wheat in two decades. Jones must go ahead and sell Rossi's wheat on Monday.

False

Mary employs Tony to purchase for her a suitable site for an office complex. Tony owns a suitable site himself and sells it to Mary for the fair market value without disclosing to her that he is the owner of the land. Tony has fulfilled his duties to Mary, because he sold the property for the fair market value, even if he failed to disclose his ownership of the property.

False

An agent is not required to keep which of the following information confidential?

Information that his or her principal is engaged in criminal activity

Mark hires Joe's real estate agency to sell his estate, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then Mark wins the three million-dollar lottery! Joe reads this in the newspaper and that afternoon makes a contract with Sharon to sell the estate. Is the contract valid?

No, the agency terminated because of the change in conditions.

All of the following except which one is a duty of an agent?

Refrain from using any information gained while an agent

An agency will terminate on the occurrence of all but which of the following?

The principal leaves the country.

A minor can act as an agent for an adult.

True

A principal may generally revoke the authority of an agent at any time by notifying the agent.

True

A principal owes to any agent the same duties under tort law that the principal owes to all parties.

True

All employees are agents, but not all agents are employees.

True

An agency agreement does not have to always be in writing.

True

An agent hired to buy gems for his principal can buy a diamond to give to his wife only if he asks his principal first; otherwise, he has breached his fiduciary duty.

True

An agent may be liable to his principal if he improperly delegates his authority.

True

An agent who violates his fiduciary duty loses the right to compensation.

True

An agent whose compensation depends on his accomplishing a specific result is entitled to the agreed compensation only if the result is achieved within a reasonable time if no time is stated.

True

An attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction.

True

As a general rule, a person may do through an agent whatever business activity he may accomplish personally.

True

Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained. Edward sells the goods in a market that is glutted and obtains a low price, even though he could have obtained a higher price in a nearby market by using more care in obtaining the available market information. Edward is liable to Diane for breach of the duty of diligence.

True

Factors in determining whether a person acting for another is an employee or an independent contractor include the kind of occupation, the skill required, which party supplies the tools, and whether payment is by the job or by time worked.

True

In a partnership, each partner is an agent of the partnership.

True

In some states, the authority of an agent to sell land must be in writing and signed by the principal.

True

Carl loans Dan $1,500 for Dan's honeymoon. Dan gives Carl his ruby ring as security for the loan and after a year, tells Carl he may as well sell it to recoup the $1,500. When Dan's wife hears of this, she persuades Dan to call Carl and get back the ring. Can Carl sell it anyway?

Yes, because Dan cannot terminate this agency

Contractual duties of a principal to an agent include all but the duty to:

account for financial benefits.

An agency:

is a consensual relationship that the principal and agent may form by contract or agreement.

A gratuitous agent:

is subject to the same duty of loyalty as other agents.

Carolyn, a cashier at Tops Supermarkets, may cash checks for up to $20 over a purchase amount. A friend needs money for a dress, so Carolyn cashes a check for $50 with no purchase. If the check bounces, Carolyn is:

liable because she violated her duty of obedience.

Jason may validly authorize Nathan to:

negotiate a contract for the sale of Jason's boat.

A(n) ______ is an instrument that evidences an agent's appointment and states the nature or extent of the agent's authority.

power of attorney

Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a videotape recorder from VideoWorld. The transaction between Joe and VideoWorld is:

voidable by Mark because he is a minor.