Com law exam 2

Which power of attorney is intended to continue beyond the principal's incapacitation?

Durable power of attorney The power of attorney is a specific form of express authority, usually in writing, granting an agent specific powers. While powers of attorney tend to terminate on the principal's death or incapacitation, a durable power of attorney specifies that the agent's authority is intended to continue beyond the principal's incapacitation.

agency

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.

Principal-agent relationships are most significant for issues that are included in the category of ________ law.

contract Principal-agent relationships are significant for issues that are included in the category of contract law. The principal-agent relationship typically exists when an employer hires an employee to enter into contracts on its behalf. This is the most basic type of agency relationship.

Which statement best describes a principal's liability for acts of an independent contractor under the doctrine of respondeat superior?

A principal is generally not liable for the acts of an independent contractor. An independent contractor is not an employee of the individual who hires him or her to do the work. Consequently, an individual who hires an independent contractor cannot be held liable for the independent contractor's tortious actions under the doctrine of respondeat superior. The principal can be held liable for the actions of an independent contractor in two instances: 1) for extremely hazardous activities undertaken by the independent contractor on behalf of the principal and 2) for torts committed by the independent contractor at the direction of the principal.

If an agency misrepresents themselves, a third party can do which of the following?

Cancel the contract and be compensated for any money lost If the principal authorizes the agent to engage in an act and the agent misrepresents themselves intentionally or unintentionally, the principal is always liable in tort to someone who relied on the agent's misrepresentation. If an agent has misrepresented themselves, the third party has two options: 1. Cancel the contract with the principal and be compensated for any money lost; 2. Affirm the contract and sue the principal to recover damages.

is perhaps the most important consideration a court makes when determining whether a worker is an employee or an independent contractor.

Employer control When courts are deciding whether a worker is an employee or an independent contractor, perhaps the most important consideration is employer control. The more control the employer has over the worker, the more likely that person is to be considered an employee. This determination is important for many reasons including taxes, social security benefits, unemployment benefits, workers compensation benefits, and more.

Which statement best describes a fiduciary?

Fiduciaries have a duty to act primarily for another person's benefit. A fiduciary is a person who has a duty to act primarily for another person's benefit. A fiduciary relationship involves trust, confidence, and good faith. A lawyer, for example, is a fiduciary for his or her client.

Which of the following is true of agency law?

It is primarily state law. Agency is generally defined as a relationship between a principal and an agent where the agent is authorized to act for and on behalf of the principal. Agency law is primarily state law. As a result, it can vary somewhat from state to state. Agency law is especially important for U.S. firms doing business globally.

Which of the following terminations occurs by act of parties?

Lapse of time If an agency agreement specifies that the relationship will exist for a certain amount of time, it will end when that time expires. If an agency agreement specifies that the relationship will exist for a certain amount of time, the agency will end when that time expires (lapse of time), which is an act of the parties. If an agent is disloyal or circumstances change or performance becomes impossible, those examples terminate an agency by operation of law.

How is a principal classified if the third party is aware of the principal's existence but not his or her identity?

Partially disclosed If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a partially disclosed principal or an unidentified principal. If a principal is partially disclosed, the agent and the principal are both considered parties to the contract and each may be liable separately from the other.

John, a real estate agent, buys for himself a property that his principal, Arthur, wanted to buy. If John is aware that Arthur wanted to buy the property, then the court will most likely take which of the following actions?

The court will grant Arthur the legal rights for the property. If John, the agent, is aware that Arthur, the principal, wanted to buy the property, then the court will grant Arthur the legal rights for the property. When an agent illegally benefits from the agency relationship, the principal may enact a constructive trust on the profits, goods, or property in question. A constructive trust is an equitable trust imposed on someone who wrongfully obtains or holds legal right to property he or she should not possess. The court then rules that the agent is merely holding the property or goods in trust for the principal, granting the principal legal right or possession.

Which of the following statements is true regarding a partially disclosed principal?

The principal and the agent are both considered parties to the contract and each may be liable separately from the other. If a principal is partially disclosed, the agent and the principal are both considered parties to the contract and each may be liable separately from the other.

A(n) ________ relationship consists of trust, confidence, and good faith.

fiduciary A fiduciary relationship consists of trust, confidence, and good faith. A fiduciary is a person who has a duty to act primarily for another person?s benefit. A lawyer, for example, is a fiduciary for his or her client.

If a third party is able to establish employee negligence such that the employer is liable, the employer has the right to recover from the employee any damages paid to the third party; such right to recover damages is referred to as the right of:

indemnification. If a third party is able to establish employee negligence such that the employer is liable, the employer has the right to recover from the employee any damages paid to the third party; such right to recover damages is referred to as the right of indemnification.

If an agency contract is for personal services, the agent does not have the right to pursue ________ as a remedy if the principal does not perform as agreed.

specific performance When a contract exists and a principal agrees to certain conditions but fails to perform, under contract remedies the agent may seek court assistance in forcing the principal to perform the contract as stipulated. However, when the agency relationship is not contractual or the contract is for personal services, an agent does not have the right to pursue the remedy of specific performance. According to the remedy of specific performance, the agent may recover for services rendered and/or future damages, but the agent may not force the principal to fulfill the specific contractual agreements or even to continue to employ the agent.

Agency contracts do not need to be in writing unless an agent has been given power of authority or if the agent will be entering into a contract that the ________blank requires to be in writing.

statute of frauds Agency agreements usually do not need to be in writing, with two important exceptions. First, the agreement must be in writing whenever an agent will enter into a contract that the statute of frauds requires to be in writing. Second, the agreement must be in writing whenever an agent is given power of attorney.

Linda hires Roy to build a shed in her backyard. Before Roy begins, the city council passes a law making it illegal to build storage units on any property in the city. The new law ________blank the agency agreement.

terminates When a new law makes the commission of an existing agency agreement illegal, the agreement is terminated.