Blaw 300 Final Exam 2.0

By using agents, a principal can conduct multiple business operations simultaneously in various locations.

True

When a third party sues a principal for an agent's negligence, the principal can sue the agent for an equal amount of damages.

True

Rosa introduces Sol to her friend Trey as "my associate." Sol purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sol's actions, it will be because their relationship is

an agency by estoppel.

Motor Parts Sales Inc. hires Nolly to work on its shipping dock, accepting deliveries, and dispatching trucks, and dealing with customers and drivers. With respect to Motor Parts, Nolly is most likely

an agent

Ray is a delivery driver for Sicilian Pasta Company. Ray does exactly what the company tells him. Ray is

an employee

Orin works at Pumps Inc. He works in the company's engineering department, interacting with third parties only to discuss technical issues. With respect to third parties, Orin is

an employee only

Dino, a certified public accountant and an investor, and Elma, an insurance salesperson and a realtor, may create an agency relationship for

any legal purpose.

Lorane, an attorney, contracts with Melos to incorporate the client's business. Their contract stipulates the amount of the fee. On completion of the work, the attorney's right to be paid this amount arises from the client's duty of

compensation.

Curly Fries Inc. grants its agent Damon an exclusive territory in which to sell its products. The company cannot compete with Damon in that territory under the duty of

cooperation.

Sal, an accountant, contracts with Torre to act on Torre's behalf during a tax audit. Their contract does not expressly state that Sal will be paid for the service. Most likely, Torre must pay

the customary compensation for the services.

The most important factor weighted by the courts in determining employee status is

the degree of control an employer exercises over the details of the work.

Isabel is an agent for Julian. He gives her clear instructions to enter into contracts on his behalf only on Mondays. She enters into a contract on his behalf on Friday. Isabel has breached

the duty of obedience.

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

True

A truck driver who drives a company truck on a regular basis is most likely an employee.

True

An agency relationship can arise by ratification, which involves a determination of intent expressed by words or conduct.

True

Any person can be an agent, regardless of whether he or she has the capacity to contract.

True

A property owner who hires a realtor to sell the property thereby enters into an agency relationship with an employee for a limited time.

False

Agency relationships cannot exist outside employment, so agency law has a narrower reach than employment law.

False

In an agency relationship, one party called the principal agrees to represent or act for another called the agent.

False

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts.

False

No breach of a fiduciary duty by an agent justifies a principal's termination of the agency.

False

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

False

An independent contractor is, by definition, an employee because the person's physical conduct is controlled, or subject to control, by the employer.

False

Nora works at Oil & Gas Inc. She is a sales representative who works with Oil & Gas customers. The company closely supervises its sales reps, and dictates their schedules. With respect to third parties, Nora is

An employee and agent

Agency relationships come about by voluntary consent and agreement of the parties—consideration is required, and the agreement must be in writing.

False

An agent can represent two principals in the same transaction, so long as neither is aware of the dual capacity.

False

An agent has the discretion whether to notify his or her principal of matters that come to the agent's attention concerning the subject of the agency.

False

An agent must keep confidential any information acquired through an agency during the term of the relationship, but can disclose it after the agency ends.

False

When an agent is an employee, he or she is covered by state workers' compensation insurance, which reduces the duty of the principal to provide safe working conditions.

False

When the relationship between a principal and an independent contractor is not an employment relationship, it is an agency relationship.

False

Rubio is injured in an accident with Stavros. Unable to use his hands due to the injury, Rubio indicates that Tam should sign a settlement agreement on Rubio's behalf with Stavros's insurance company. This is

an agency by agreement.

For the same reasons that workers may benefit from having employee status, employers may benefit from identifying workers as independent contractors.

True

If a principal's instructions are not clearly stated, an agent can fulfill the duty of obedience by acting in good faith and in a reasonable manner.

True

If a sales agent and principal disagree on the commissions the agent should have received over a certain period, the agent can demand an accounting.

True

If an agent has represented himself or herself as possessing special skills, the agent is expected to use them.

True

In some situations, the courts find an agency relationship where there is no formal agreement.

True

The greater the employer's control over the work, the more likely it is that the worker is an employee.

True

Lasers Inc. hires Mal to buy rare earth minerals on its behalf. In this relationship, Lasers is

a principal

Kit hires Lane to obtain insurance for Kit's business. Lane agrees to act on Kit's behalf in the effort, and Kit trusts Lane to so act. Their relationship is

a principal and an agent.

Lau, an agent for Mae, acts outside the scope of her authority, to enter into a contract on Mae's behalf. Mae approves of the deal and affirms the contract. This is

agency by ratification.

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn. Jess orally agrees to do so. This is an agency by

agreement

Watercraft Inc. employs Vern as a sales agent for a trial period. At the end of the period, Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made. Vern may demand

an accounting

Pho enters into an exclusive agreement with Qin to find suitable property for Qin's enterprise. Later, Qin signs an exclusive agreement with Row for the same purpose. Neither agent knows about the other, and each expends reasonable efforts to perform. Qin buys a building through Pho. Most likely, Qin may be liable to Row for

breach of the duty of cooperation.

Because those who cannot legally enter into contracts directly cannot do so indirectly through an agent, a principal must

have contractual capacity to be a principal.

Ana, a sales agent for Bread Company makes claims for a product that the company has told its agents not to make. Croissant Café sues the firm when the product fails to stand up to the claim. The company can sue Ana for

indemnification

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm. Jon makes a deal with Lila for the sheep, but neither Jon nor Kino pays the price. Lila sues Jon for breach. Jon's right to hold Kino liable for any damages is the right to

indemnification.

Hayes, a real estate broker, offers to sell Invers's property at no charge. Hayes negotiates a sale to Jed, but negligently fails to complete the deal. The broker is most likely liable to the seller for

negligence.

Roc is an agent for Statistics Inc. On the firm's behalf and at its request, Roc pays Tech LLC for specially customized software. Roc's right to obtain the amount of the payment from Statistics Inc. arises under the duty of

reimbursement.

Anything that an agent obtains by virtue of an agency relationship is held in a constructive trust and thereby belongs to

the principal.

When an agent breaches an agency agreement, the right to avoid the contract can be exercised at the election of

the principal.