Deck 18: Agency Law

Question 1

Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George.

-George buys the house and Chris is paid for his services. Who performs the role of the agent in this land sale transaction?

A) William
B) Martin
C) Chris
D) George

Answer 1

William

Question 2

Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George.

- George buys the house and Chris is paid for his services. In this scenario, who is the principal during the land sale transaction?

A) ReNowait Goodhouses
B) George
C) Martin
D) William

Answer 2

Martin

Question 3

Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George.

- George buys the house and Chris is paid for his services. In this scenario, what type of commercial relationship exists between Martin and William?

A) an employer-employee relationship
B) an agent-agent relationship
C) an agent-independent contractor relationship
D) a principal-agent relationship

Answer 3

a principal-agent relationship

Question 4

Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George.

-George buys the house and Chris is paid for his services. In this scenario, what role does ReNowait Goodhouses perform?

A) agent
B) independent contractor
C) principal
D) trustee

Question 5

Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays it. Chris then searches for a suitable buyer and finds one in George.

- George buys the house and Chris is paid for his services. In this scenario, what role does Chris perform?

A) independent contractor
B) agent
C) principal
D) trustee

Question 6

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon must not hire another broker to sell that piece of land until the expiration of the contract period.

-Nita finds a suitable buyer, makes the sale in time, and Marlon pays for her services. Which of the following types of agencies had Marlon and Nita entered into?

A) apparent agency
B) agency by ratification
C) implied agency
D) express agency

Question 7

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon must not hire another broker to sell that piece of land until the expiration of the contract period.

- Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services. What kind of contract existed between Marlon and Nita?

A) an apparent agency contract
B) a ratified contract
C) an exclusive agency contract
D) an exclusive principal contract

Question 8

Taylor gives a power of attorney to his twin brother Corey, permitting Corey to make all decisions on his behalf while he is abroad. As per the terms of the power of attorney, Corey is allowed to make decisions to purchase or sell stocks on Taylor's behalf, sell Taylor's real estate if he deems it to be in Taylor's best interest, pursue or defend lawsuits on Taylor's behalf, and make all other relevant decisions for Taylor. What kind of power of attorney confers such powers to Corey?

A) a special power of attorney
B) a limited power of attorney
C) an implied power of attorney
D) a general power of attorney

Question 9

Marcus employs a real estate broker, Dean, to sell his house. Dean's express powers are to advertise and market the house for sale, show the house to prospective buyers, and accept offers from persons who want to purchase the house. He is not allowed to complete a deal without Marcus's consent. Marcus goes away on a month-long trip where he cannot be contacted. During this time, a short circuit in the house causes a power outage. Dean uses his authority to hire an electrician to repair the circuits and restore electricity in the house. Marcus then comes back and pays Dean for the electricity repair. What is the nature of the agency that Dean used to fix the electricity problem in the house?

A) implied agency
B) agency by ratification
C) power of attorney
D) express agency

Question 10

Describe the concept of apparent agency.

Question 11

Ronald, the purchasing manager of Telly's Supermarket in Georgia, was asked to purchase the latest video game console, FunCase, to be kept in the supermarket. Due to a truckers' strike, Ronald had to personally make the trip to the FunCase warehouse in Florida to pick up the console. Ronald paid for the trip himself, went to the warehouse, procured the console, and returned. After he got back, Telly's Supermarket paid Ronald for the personal expenses he incurred in making the trip to Florida. What duty of the principal did Telly's Supermarket satisfy when it paid Ronald for the trip?

A) duty to cooperate
B) duty to reimburse
C) duty to compensate
D) duty to indemnify

Question 12

List the four duties that a principal owes to an agent.

Question 13

Ashley owns a piece of vacant real estate through which a small river runs. Ashley hires Warren, a licensed real estate broker, to list the property for sale and help sell the property. While inquiring in the neighborhood, Ashley's neighbor Lenny tells Warren that a chemical plant upstream has polluted his property and that Warren should have environmental engineers test the soil on Ashley's property as well. Warren does not tell Ashley about Lenny's suggestion. Warren manages to find a buyer for Ashley's property in Martha. It is later discovered that the property Martha bought from Ashley is also polluted. What important agent's duty has Warren failed to perform?

A) duty to indemnify
B) duty to account
C) duty to reimburse
D) duty to notify

Question 14

Minksine Corporation employs Sandy as its marketing manager. Sandy is driving her automobile to attend a meeting with a client on behalf of her employer. On her way, Sandy is involved in an automobile accident that is caused by her negligence. Several people are seriously injured. Which of the following is true of this case?

A) Sandy is solely liable for damages caused by the accident.
B) The injured parties cannot recover damages from Sandy.
C) Minksine Corporation is liable for the injuries caused by Sandy.
D) The injured parties can only claim medical reimbursement from Minksine Corporation.

Question 15

Fiona works for Open Heart Hospital and lives 10 miles away from her place of work. The hospital has provided her with a car to commute and also pays for its upkeep. If she accidentally injures a person while driving to work in the morning, which of the following will be true?

A) Open Heart Hospital will be completely liable for the injury.
B) The injured person can sue Open Heart Hospital, but can only recover reimbursement for his or her medical expenses due to the injury.
C) Both Fiona and Open Heart Hospital will be liable to the injured person.
D) Only Fiona will be liable for her negligence.

Question 16

Explain the legal concept of "frolic and detour"as it relates to the liability of a principal for the torts of an agent.

Question 17

Compare and contrast the "motivation"test and the "work-related"tests.