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Exam 20: Agency and Liability to Third Parties

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Question 41

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In an express agency relationship,the agent has ________ authority.

A) express
B) implied
C) apparent
D) inherent
E) statutory

F) B) and E)
G) A) and B)

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Question 42

Multiple Choice

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Which of the following is true regarding the liability of an agent acting within his or her authority on a contract involving an undisclosed principal?

A) The law will likely hold the agent liable for the agreement.
B) The law will hold the agent liable for the agreement unless the contract the agent had with the principal expressly provided that the agent would not be held liable in such cases.
C) The law will hold the agent liable for the agreement unless the contract the agent had with the principal implicitly or expressly provided that the agent would not be held liable in such cases.
D) The law will hold the agent liable for the agreement unless a contract for under $500 is involved,in which case only the principal would be held liable.
E) The law would not hold the agent liable on the agreement.

F) B) and C)
G) All of the above

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Question 43

Multiple Choice

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Which of the following is not a form of authority upon which an agency relationship can be created?

The Big Sale.Christy,the owner of ABC department store,needed to hire a number of employees in a hurry because of a planned big summer sale.Bob was hired by Christy to run a cash register and to assist customers with taking large purchases to their cars.Bob encountered a particularly annoying customer,Frank.Frank started complaining the minute he saw Bob.Frank complained about having to wait for Bob to assist him with carrying his television purchase to his car,the merchandise in the store,and the quality of the store's employees.Bob tried to control himself while he carted Frank's television to the car.The final straw,however,came when Frank told Bob that he should get the earring out of his ear,cut his hair,and act professionally.Bob threw the television to the ground and punched Frank in the nose.Frank investigated and discovered that Bob has just been fired from his last three jobs for violent actions against customers.Two of his former employers are willing to testify that if Christy had called them,they would have disclosed Bob's tendencies to her.Bob listed the former employers on his application,but because she was in a hurry to hire employees,Christy did not take the time to check with the former employers.Another problem confronting Christy during the big sale is that Susie,a long-time employee of Christy's who had never caused any problem before,negligently dropped a box on the foot of Greg,a customer.Greg had to have an X-ray and is threatening to sue both Christy and Susie.Which of the following is true regarding whether Greg has any right of recovery against Susie for his injured foot?

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal?

In order to properly provide notice of the termination of an agency relationship,actual notice of agency termination must be given to third parties who have had business interactions with the agent.

When a principal is classified as a ________ principal,a third party is aware that an agent is making an agreement on behalf of the principal and the third party also knows the identity of the principal.

Set forth the rationale behind the doctrine of respondeat superior and discuss whether you believe it is an appropriate doctrine for our society.

The Big Sale.Christy,the owner of ABC department store,needed to hire a number of employees in a hurry because of a planned big summer sale.Bob was hired by Christy to run a cash register and to assist customers with taking large purchases to their cars.Bob encountered a particularly annoying customer,Frank.Frank started complaining the minute he saw Bob.Frank complained about having to wait for Bob to assist him with carrying his television purchase to his car,the merchandise in the store,and the quality of the store's employees.Bob tried to control himself while he carted Frank's television to the car.The final straw,however,came when Frank told Bob that he should get the earring out of his ear,cut his hair,and act professionally.Bob threw the television to the ground and punched Frank in the nose.Frank investigated and discovered that Bob has just been fired from his last three jobs for violent actions against customers.Two of his former employers are willing to testify that if Christy had called them,they would have disclosed Bob's tendencies to her.Bob listed the former employers on his application,but because she was in a hurry to hire employees,Christy did not take the time to check with the former employers.Another problem confronting Christy during the big sale is that Susie,a long-time employee of Christy's who had never caused any problem before,negligently dropped a box on the foot of Greg,a customer.Greg had to have an X-ray and is threatening to sue both Christy and Susie.Which of the following is a theory under which Christy may be held directly liable for her own tortious conduct regarding Frank's injury?

Which of the following is true regarding an agent's liability when a third party obtains a judgment against a previously undisclosed principal?

Which of the following is a false statement regarding the agency relationship?

Which of the following is false regarding the employer-employee relationship?

How did the appeals court rule in Steven A.B.Hannington v Trustees of the University of Pennsylvania and Dr.Mark Bernstein,the case in the textbook where the plaintiff,a student suing for alleged wrongful expulsion,attempted to avoid a settlement agreement entered into by an attorney acting on his behalf?

The Restatement of Contracts defines an agent as 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.

Pursuant to the duty of ________,the agent must communicate to the principal offers from third parties,and he or she must also communicate any information the agent thinks could be important to the principal.

Nasty Break-Up.Harold wants to purchase a lot next door to Sarah's home that is owned by Sarah.Harold knows Sarah will not sell the lot to him because they dated in the past and had a nasty break-up.Harold agrees with Alice that Alice will purchase the lot from Sarah for him.Alice and Sarah reach an agreement and enter into a contract whereby Sarah is to sell the lot to Alice for a price within the scope of Alice's authority.Alice tells Sarah nothing about her plan to later transfer the lot to Harold.Before title to the lot is transferred to Alice,Harold tells Alice that he no longer wants the lot.Alice tells Sarah about Harold.Sarah tells Alice that as far as she is concerned,Alice has bought the lot.Sarah says that she plans to move anyway and really does not care whether Alice or Harold ends up with the lot.She just wants her money.What type of principal is Harold?

An agency relationship can be created only for a lawful purpose.

Which of the following is true regarding the right of a third party to reject the performance of the principal?

Which of the following is true regarding the liability of a principal to an agent based on a contract an agent makes with a third party that expressly excludes the principal from the contract?

Which of the following is true regarding the tort liability of employers for the actions of their employees and independent contractors?