BLAW chapter 14

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

__ is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking

a general agent

to carry out their duties, universal agents are typically granted

a general power of attorney

Lisa works for Sally. Lisa's jobs include selling the folk-art Santa Claus statutes that Sally hand makes, as well as purchasing the wood for the statutes. In this case Lisa is:

a servant and an agent

someone designated to do all acts that can be legally granted to an agent is called

a universal agent

which of the following is an advantage to having the ability to use agent

access to the expertise of agents expanded business operations

the duties of a principal to an agent do not include

allowing the agent "significant discretion"

employments-at-will

allows employees to quit their jobs for any reason at any time allows employers to discharge employees for any reason at any time subject to contract obligations has been restricted by the courts or legislatures in some states that recognize some public policy limitations on the employer's right to fire an employee

an agent's ____ is the power to change the principal's legal obligations

authority

subagents work for the agent and owe duties to

both the agent and the principal

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

which of the following is not a duty owed by the agent to the principal

compensation

an agency may not be ended by

decision of a third party opposed to the agency

suppose a car dealership hires people to sell cars to customers at the dealership. the people who are hired are most likely to be

employees and agents

a _____ relationship is one in which one person is an employee whose conduct is controlled by the employer

employer-employee

the power of an agent to do whatever is reasonable and customary to carry out the agency purpose is given by

implied authority

the principal's duty to reimburse does not cover expenses

incurred due to the agents misconduct or negligence

attorneys, auctioneers and other such persons who conduct business on behalf of the principal are examples of

independent contractors who are also agents

a disclosed principal 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

when an employer-employee relationship exists employers

may be liable for the torts committed by employees in the course of employment

many states require agencies that will exist for _____ to be established in writing

more than one year sale of land

legal document that establishes some agency relationships is known as

power of attorney

which of the four general factors which bear upon whether a master-servant relationship exists is determinative

power of control

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

principal

through an agency relationship, the agent becomes a representative of the

principal

traditionally, the chief difference between an agent and a servant was that the

servant was generally not employed to represent a principal in business dealings

You hire an agent to sell your house for you. Typically, such an agent receives a fee only if they actually sell the house. This person is most likely:

special agent

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

special agent

persons appointed by an agent delegated some authority are known as

subagents

an agency ends without any action by the principal or the agent through

termination by operation of law

implied ratification usually occurs when

the agent accepts the benefits of the agreement

for an agency to be valid in most states

the agent must be subject to the principals control

a principals ratification is

the principals acceptance of responsibility for an agents activities

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

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

the trade customs in business

an agency through operation of law is established

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

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

fiduciary duties include

accounting, notification, 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 principals 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

____ is the authority given by the principal to the agent

actual authority

the agents 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 party is known as

agency relationship

when an agent pays for the right to have authority for a business a ______ is created

agency with coupled with an interest

a real estate agent is an example of a

agent

an auctioneer is an example of a

agent and independent contractor

a key element of an agency relationship is

an agents ability to transact business for the principal

operations 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 principal the agent is said to have

apparent authority

an agency couple with an interest is created

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

A(n) ____is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the principal.

disclosed principal

because of the _____ an agent may not represent another party whose interests are in conflict with those of the principal

duty of loyalty

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 principal 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 agents losses (such as from litigation) suffered while undertaking authorized transactions for the principal

duty to indemnify

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

duty to inform

a principal has a _______ the agent for reasonable expenses incurred in carrying out the duties of the agency

duty to reimburse

an agency can be ended upon reasonable notice by

either the agent or the principal

a UPS package sorter is an example of a

employee

a senior manager at don reid ford is an example of

employee with agency powers

a _____ is a principals 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

an agent is a _____ of the principal, which means that the agent occupies a position of trust, honesty, and confidence for the principal

fiduciary

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 expectation of being paid for her services is a

gratuitous agent

if a contractor does not have authority to enter into contracts for the principal then

he is not an agent

if an agent competes with his principal without the principals consent

he is violating his duty of loyalty

the principals duty to indemnify the agent means the principal must

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

because of the duty to inform, an agent must

keep her principal informed of all facts relevant to the agency

the buyer for an electric store is bribed by a supplier to order more of the brand sold by the supplier. this action violates which of the agents duties

loyalty

the duty of _____ requires an agent to place the principals interests before the agent's personal interests or those of any third party

loyalty

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

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

for an agent to be a fiduciary means to

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

an agency may be established by

operations of the law means of the doctrine estoppel ratification oral agreement or written agreement

the scope of an agents authority is determined from the

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

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

principal-agent

in an agency the principal

provides the agent with authority

when a principal accepts the consequences of the activities of a 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

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 principal ends

an agent must perform instructions provided by the principal. if the agent fails to do so he violates

the duty of obedience and performance

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

the duty of reasonable care

the independent contractor is distinguished by

the extent of control the employer retains over work performance

to ratify an agreement a principal must know

the important facts of the agreement

which of the following is least likely to be an issue in determining if an employer has hired an employee or an independent contractor

the level of compensation

actual authority give the agent

the power and right to change the principals legal status

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

which of the following would lead to termination by operation of law for an agency

the principal dies the agent dies the subject matter of the agency is destroyed

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

third parties

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 not to mix personal funds with the funds of the principal is the duty

to account

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

undisclosed principal

the principal may hold the third party to a contract, in an undisclosed principal situation, except when the

undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract or the undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract

an undisclosed principal is

unknown to third parties to contracts entered into with the agent