Question 1

Briefly discuss the importance of the agency relationship to business,including what it is,what it allows,how it is used,and the advantage derived from using it.

Accepted Answer

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Question 2

Briefly describe the types of duties owed by an agent to his principal and indicate which of those duties would be considered to be the most important.Contrast the agent's duties with those owed to the agent by his principal.

Accepted Answer

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Question 3

An agent is bound by a fiduciary duty to avoid undisclosed,unauthorized conflicts of interest.

Accepted Answer

As a fiduciary, an agent is obligated to act in the best interest of their principal and to avoid any conflicts of interest that could potentially harm or create a disadvantage for the principal. This includes disclosing any relationships or situations that could create a conflict of interest and obtaining authorization from the principal before engaging in any activities that could be seen as a conflict.

Question 4

An agent automatically owes a fiduciary duty to his principal.

Accepted Answer

This is a basic principle of agency law - that an agent has a fiduciary duty to act in the best interests of their principal. This means that the agent must avoid conflicts of interest, act with due care, and keep the principal informed of all relevant information.

Question 5

Outline the ways in which a principal can be legally bound to a contract by application of the law of agency.

Accepted Answer

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Question 6

Explain why agency by estoppel forces a principal to be bound by an unauthorized contract.Contrast and briefly discuss this with respect to a principal's position under agency by ratification.

Accepted Answer

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Question 7

Identify how a fiduciary duty arises,who is it owed to,and any requirements with regard to specifically state the duty.Provide a brief explanation of what the fiduciary duty is with regard to conflict of interest and how that obligation may be overcome.Provide an example of a conflict of interest situation.

Accepted Answer

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Question 8

Identify the typical fiduciary duties of an agent.

Accepted Answer

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Question 9

Identify and briefly describe how an employed clerk typist may be transformed into the business's agent.

Accepted Answer

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Question 10

Identify the circumstances under which a principal would be permitted,by law,to ratify a contract.

Accepted Answer

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Question 11

Identify each type of agency authority and describe what is required of the principal in each instance.

Accepted Answer

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Question 12

Identify and briefly describe the implied power a general manager of a hockey team presumably would have.Contrast the hockey team general manager's implied power with that presumably given to a manager of a convenience store.

Accepted Answer

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Question 13

There is an absolute prohibition against acting for two principals simultaneously.

Accepted Answer

There is no absolute prohibition against acting for two principals simultaneously, but it is generally discouraged due to potential conflicts of interest. Proper disclosure and consent from both parties are typically required.

Question 14

A principal whose identity is unknown to a third party who has no knowledge that the agent is acting in an agency capacity is legally known as an undisclosed principal.

Accepted Answer

This is the definition of an undisclosed principal.

Quiz 13: The Agency Relationship