Business Law Chapter 32
Ozzy is an officer of Prudent Financial Corporation. Ozzy serves in a representative capacity for Prudent Financial's owners. With respect to binding Prudent Financial to contracts, Ozzy is
an agent AND has the authority.
Calvin is a minor. In most states, Calvin may be
an agent BUT NOT a principal.
Carol agrees with Dede and other performers to sign contracts with promoters and others on the performers' behalf. Carol is
an agent.
Genetic Seed Company hires Howie to work on Genetic's shipping dock, accepting deliveries and dealing with other companies' drivers. With respect to Genetic, Howie is most likely
an agent.
Diego is a truck driver for Entertainment Supplies Company (ESC). Diego does exactly what ESC tells him. Diego is
an employEE.
Omar is Precise Service Company's chief executive officer. On Precise's behalf, Omar solicits business, hires and fires workers, and handles the finances. Precise pays Omar varying amounts, depending on his "needs." Omar is most likely
an employEE.
Ester is a lighting technician who hires out on a per-project basis to film and television production companies, as well as theatres and other venues that stage dramatic and musical performances. In this capacity, Ester is
an independent contractor.
Fact Pattern 32-1B. Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not authorized to modify the prices or other terms of a sale at the shop. Nia hires O'Reilly's Carpet Company to clean the carpets of her shop. Nia gives O'Reilly's instructions as to what needs to be cleaned and when. O'Reilly's is
an independent contractor.
United Sales Corporation hires Victor to act as its agent. United's right not to perform a contract entered into by Victor, if Victor breaches their agency agreement, is the right of
avoidance.
Clearview 3D HD TV Company grants its agent Blossom an exclusive territory in which to sell Clearview products. Clearview cannot compete with Blossom in that territory under the principal's duty of
cooperation.
National Computer Corporation (NCC) employs Cynthia as an agent. NCC gives her an exclusive territory in which to sell NCC products. NCC cannot compete with her in that territory under the duty of
cooperation.
Tri-state Financial Corporation hires Uri, a real estate agent, to locate investment properties for Tri-state. Uri learns of a warehouse available for $100,000, informs Tri-state, and makes an offer of $90,000 on Tri-state's instruction. The offer is rejected. Uri
did nothing wrong.
Mona is an agent for Nationwide Restaurant Corporation (NRC). In acting as an agent, Mona follows all of NRC's clearly stated instructions. This responsibility arises under
the agent's duty of OBEDIENCE.
Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under
the doctrine of estoppel.
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob installs for half the store's price. Bob keeps the money. Bob has breached
the duty of LOYALTY.
Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached
the duty of LOYALTY.
Prospective Enterprises (PE) employs Quinn to buy property for a possible commercial development. Quinn secretly buys some of the property and sells it to PE at a profit. Quinn has breached
the duty of LOYALTY.
Regional Investment Corporation (RIC) hires Sam, a real estate agent, to locate investment properties for RIC. Sam learns of a warehouse available for $100,000, but neglects to tell RIC. Most likely, Sam
BREACHED the agent's fiduciary duties to the principal.
Fact Pattern 32-1B. Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not authorized to modify the prices or other terms of a sale at the shop. Nia authorizes Liz to sell clothes at remote locations at prices that Liz negotiates in those locations. With respect to sales at those locations, Liz is
Nia's employee AND agent.
Fact Pattern 32-1B. Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not authorized to modify the prices or other terms of a sale at the shop. At the shop, Liz and Molly are
Nia's employees AND agents.
Louis, a certified public accountant and an investor, and Maria, an insurance salesperson and a realtor, may create an agency relationship for
a LEGAL purpose only.
Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of
a person having those skills.
Jim agrees to act on Kit's behalf, subject to Kit's control, and Kit trusts Jim to so act. This describes a relationship between
a principal and an agent.
Espresso Roast Company hires Forrest to work on Espresso's shipping dock, checking outgoing loads and dispatching Espresso's drivers. With respect to Forrest, Espresso is most likely
a principal.
Miracle Motors employs Norris as a sales agent for a trial period. At the end of the period, Miracle Motors and Norris disagree on the amount of the commissions Norris is due for sales that he made. Norris may demand
an accounting.
Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela to so act. They set out the terms in a written document, which they both sign. This is
an agency by AGREEMENT.
Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to approve the contract. This is
an agency by RATIFICATION.
Macro Corporation and National Purchasing Company may create an agency agreement
by conduct, in writing, OR orally.
Fact Pattern 32-1A. Janet and Julie work at ABC Interiors. Janet is a designer who works with clients of ABC on interior design projects. ABC closely supervises all of its designers, and dictates their work schedules. Julie works part-time in the evenings cleaning the offices. JANET is ABC's
employee AND agent.
Fact Pattern 32-1A. Janet and Julie work at ABC Interiors. Janet is a designer who works with clients of ABC on interior design projects. ABC closely supervises all of its designers, and dictates their work schedules. Julie works part-time in the evenings cleaning the offices. JULIE is ABC's
employee OR independent contractor, depending on whether ABC controls the details of her physical performance.
KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's
employee.
Rangle contracts with Siena to buy a certain horse for her. Rangle makes a deal with Timberline Stables, the owner of the horse, and makes a down payment. Siena fails to pay the rest of the price. Timberline sues Rangle for breach of contract. His right to hold Siena liable for any damages that he has to pay is the right of
indemnification.
Teresa owns a used-car lot where Salvatore works as a salesperson. Teresa tells Salvatore not to make any warranties for the cars. To make a sale to Rosa, however, Salvatore adds a 50,000-mile warranty. Later, Rosa sues Teresa for breach of warranty. Teresa's right to hold Salvatore liable for any damages she has to pay is the right of
indemnification.
Delicious Coffee Company hires Elton to sell Delicious's products in a certain area. Delicious agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The key factor in whether Elton is Delicious's employee is
the CONTROL Delicious has over the details of the work.
Mackenzie, an agent for Lindsay, signs an agreement with Kirk on Lindsay's behalf but neglects to tell her that the agreement requires the payment of a certain tax. The government prosecutes Lindsay for failing to pay the tax. She is
liable, because notice to MACKENZIE is notice to Lindsay.
Elle is an agent for Fine Cosmetics, Inc. Elle owes Fine Cosmetics the duty of
performance.
Glen is an agent for Hi-Flite, Inc. On Hi-Flite's behalf and at its request, Glen pays Ian for certain plane maintenance and repair services. Glen's right to obtain the amount of those payments from Hi-Flite arises under the principal's duty of
reimbursement.
Jody is an agent for Kwik Credit Company (KCC). In the course of Jody's performance for KCC, Jody pays Leo for certain auto maintenance and repair services. Jody's right to obtain the amount of those payments from KCC arises under the principal's duty of
reimbursement.
Pam is an agent for Refined Chemicals Corporation. Refined Chemicals owes Pam the duty of
safe working conditions.
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as to the level of sales that Rita is expected to achieve. She must
use reasonable diligence and skill in selling.