Law chp. 14

Subagents work the agent and owe duties to:

both the agent and the principal

The principal's duty to reimburse does not cover expenses:

incurred due to the agent's misconduct or negligence

An agent with authority to represent the principal only for specific transaction, usually for a limited time is a:

special agent

An agency relationship normally involves the use of an agent to represent a principal in dealing with which of the following:

third parties

In most states, which agencies must be in writing:

those that are for the sale of land

Which of the following is an advantage to having the ability to use agents:

-access to the expertise of agents -expanded business opportunities

Which of the following is part of the principle's duty to cooperate:

-providing a safe work environment -warning the agent of any unreasonable risk associated with the agency -not furnishing goods of inferior quality to the agent

Which of the following can determine the scope of authority given to an agent

-the trade customs in business -the principal's conduct -statements of the principal

A key element of an agency relationship is

An agent's ability to transact business for the principal

In Bearden v. Wardly Corp. Bearden sued Wardley because one of its agents, Gritton, bought a house from her and then cheated her on the transaction, the court held that:

Gritton and Wardley violated their fiduciary obligations to Bearden, so both are liable

In which of the following situations can an agency relationship be created/

X hires Y to buy some property on X's behalf and X makes an oral agreement that Y will work for X's company as the company's general manager and X and Y enter into a written agreement that Y will work for X as the general manager of X's company

To carry out their duties, universal agents are typically granted:

a general power of attorney

Fiduciary duties include:

accounting, notification, and performance loyalty and reasonable care

Agency by estoppel means:

actions by the principal lead a person to believe that the presumed agent has authority to act on the principal's behalf

The authority given by the principal to an agent, conferring on the agent the power and right to change the principal's legal status is referred to as:

actual authority

The agent's ability to transact business on behalf of and for the principal depends on whether the agent possesses:

actual or apparent authority

An employment of an agent for the purpose of representation in establishing relations between a principal and third parties in known as an:

agency relationship

Operation of law provides agents with the authority to act beyond the authority granted by the principal when:

an emergency exists

When a principal creates an impression of authority in an agent that leads a third party to conclude that the agent has authority to act for the principle, the agent is said to have

apparent authority

An agent's _____ is the power to change the principal's legal obligations

authority

Express ratification creating an agency by the principal occurs when the principal:

by action shows a clear intent to be bound by unauthorized acts of the agent

An agency coupled with an interest is created

by an agent who has paid for the right to exercise authority with regard to a business

A ____ is one whose identity is unknown by the third party at the time when a contract is entered into with an agent

clear principal

Which of the following is not a duty owed by the agent to the principle:

compensation

In Bearden v. Wardley Corp. where Gritton's real estate agent cheated her in a deal, the court held that Wardley, Gritton's employer, violated its ____ to bearden:

duty of care

An agent has a ____ the funds and property of his principal that have been entrusted to him or have come into his possession

duty to account for

If an agency agreement did not specify how much an agent would be paid for his work, the principle has a ___the "customary" amount

duty to compensate

The principal has a ____ with her agent by performing responsibilities defined in the agreement forming the agency

duty to cooperate

The principal is under a ____ for damages to cover the agent's losses suffered while undertaking authorized transactions for the principal

duty to indemnify

A principle has a ____ the agent for reasonable expenses incurred in carrying out the duties of the agency

duty to reimburse

An ____ relationship is one in which one person is an employee whose conduct is controlled by the employer

employer-employer

A ____ principal's clear signal to be bound to the otherwise unauthorized agreement

express ratification

Implied ratification of an agency occurs when the principal

fails to object to the unauthorized activities of an agent and accepts the benefits of an unauthorized agreement with a third party

If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the principle must pay the agent:

for the reasonable value of the services provided

Which of the following is not a category of agents covered in the text:

foreign agent

A manager who runs all aspects of a hotel is most likely what kind of agent

general agent

A person authorized to execute all regular transactions connected with a business is called a:

general agent

A person who volunteers with no exception of being paid for her services is a:

gratuitous agent

Carla agrees to try to sell Frank's prize dog Spike for him. Carla does this as a favor to Frank because she knows many professional dog breeders. Carla may be described as:

gratuitous agent

The principal's duty to indemnify the agent means the principle must:

insure the agent against losses suffered during the course of authorized transactions

Power of attorney:

is a document that creates an agency

Suppose a hurrican is going to hit South Florida, there are two days to prepare for it and the owner of a house is on a raft trip in Brazil and cannot be reached. The next door neighbors spend $800 on plywood and other materials to protect the house from the hurrican. Legally, this expenditure is likely to be:

is the responsibility of the homeowner, there is agency by operation of law

A disclosed principle is a principal whose identity is:

known to third parties to contracts entered into with the agent

When there is an undisclosed principal, the agent is:

liable to the third party for the principal's nonperformance of the contract

The duty of ____ requires an agent to place the principal's interests before the agent's personal interests or those of any third party

loyalty

Many states require agencies that will exist for ____ to be established in writing

more than one year

If an agent claims to have authority but in fact has none, the principal is:

not responsible for the agent's dealings with third parties who have no reason to think the agent has authority

For an agent to be fiduciary means to:

occupy a position of trust, honesty, and confidence with respect to the principal

An agency may be established by:

operation of law or by oral agreement of the parties or by written agreement of the parties

The scope of an agent's authority is determined from the

oral or written expressions of the principal or the principal's conduct or the customs in the business for which the agent is employed

A legal document that establishes some agency relationships is known as:

power of attorney

An agency is created when an agent agrees to act for, or in place of, the:

principal

Through any agency relationship, the agent becomes a representative of the:

principal

A _____ relationship is one in which an agent acts on behalf of or for the principle, with a degree of personal discretion

principal-agent

In an agency the principal:

provides the agent with authority

Clark, a movie producer, was allowed to work at a movie production company's offices out of courtesy. His business card listed the ITC address and his phone calls were handles by ITC staff. In the office, he made a deal to produce a movie for another company. When the problems developed and the company, presuming Clark worked for ITC, sued ITC. The court would be likely to hold that ITC.

ratified Clark's actions and so became liable for his actions

When a principal accepts the consequences of the activities of person who had previously not been the principal's agent, the principal:

ratifies the agency

An alleged principal becomes a real principal by:

ratifying the agreement

Many states require for ___ to be established in writing

sale of land

Persons appointed by an agent delegated some authority are known as:

subagents

For an agency to be valid in most states:

the agent must be subject to the principal's control

The law of agency places its primary emphasis on the duties:

the agent owes to the principal

When an agency is terminated

the agent's authority to act for the principle ends

The duty of an agent to perform responsibilites with the degree of care that a reasonable person would exercise under the circumstances is

the duty of reasonable care

To ratify an agreement a principal must know:

the important facts of the agreement

Implied authority consists of

the power to do whatever is reasonable and customary to carry out the agency purpose

To establish an agency relationship:

the principal and agent must agree to form an agency

A principal's ratification is:

the principal's acceptance of responsibility for an agent's activites

Which of the following would not be a factor in determining a ratification:

the third party wishes for the principal to be a party to a contract

An agent must be able to show where money or property comes from and goes to because of his duty

to account

The duty of an agent to keep his principal informed of all facts relevant to the agency purpose is called the duty:

to inform

Someone designated to do all acts that can be legally granted to an agent is called a:

universal agent

An undisclosed principle is:

unknown to third parties to contracts entered into with the agent

In Cove Management v. Aflac, Galgano, an independent contractor who solicited insurance business for aflac, rented office space from cove under aflac's name. When Galgano defaulted on payments, Cove sued Aflac contending that Galgano was its agent when he rented the office, so Aflac was liable. The appeals court held that aflac:

was not obligated to the lease because Galgano did not have apparent authority to sign a lease that would bind Aflac

Agreement of the parties, ratification of the agent's activities by the principal, application of the doctrine of estoppel and operation of law are all:

ways that an agency be established

An agency through operation of law is established:

when an emergency exists and the "agents" actions are in the public interest

express authority consists of the agents

written or oral instructions from principal to agent

You post a notice at school that you will sell your laptop computer for $600. A buyer comes by your room to look at it while you are gone and your roommate sells it for $500, thinking you would be happy with that price, which you did not authorize

you can accept the deal by express or implied ratification