MindTap: Worksheet 19.4: Liability in Agency Relationships

If an agent has authority to sign a contract on behalf of a disclosed principal, the third party may hold either the principal or the agent responsible to perform.

False

Match each term to the correct definition.

Respondeat superior: A doctrine under which a principal or an employer is held liable for the wrongful acts committed by agents or employees while acting within the course and scope of their agency or employment. Vicarious liability: Legal responsibility placed on one person for the acts of another.

A principal who authorizes an agent to commit a tort may be liable to persons or property injured, because the act is considered to be that of the principal.

True

If an agent has no authority but nevertheless contracts with a third party, the principal generally cannot be held liable on the contract.

True

Liability for contracts formed by an agent depends on how the principal is classified and on whether the actions of the agent were authorized or unauthorized.

True

If an agent is on a _____, the principal will be liable, but if the agent is on a _____, the principal will not be liable.

detour; frolic

A principal will be liable for the intentional torts of an employee-agent in all of the following situations, except:

if the agent committed the intentional tort while on a frolic.

Which of the following is not a classification of a principal?

materially disclosed

A principal is always responsible for an agent's _____ made within the scope of the agent's authority.

misrepresentations

A principal may be liable for the tortious conduct of an agent based on the principal's own actions in all of the following scenarios EXCEPT:

providing explicit accurate written instructions to the agent.

Match each term on the left to the correct definition on the right.

Disclosed principal: A principal whose identity is known to a third party at the time the agent makes a contract with the third party. Undisclosed principal: A principal whose identity is unknown by a third person, and the third person has no knowledge that the agent is acting for a principal at the time the agent and the third person form a contract. Partially disclosed principal: A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the contract is made.

If the third party knows at the time the contract is made that the agent does not have authority, the principal nonetheless remains liable.

False