Question 1

An agent can represent two principals in the same transaction as long as neither of them knows about it.

Accepted Answer

It is considered a conflict of interest for an agent to represent two principals in the same transaction without their knowledge and consent. This is prohibited by law and can result in disciplinary action for the agent.

Question 2

An agency by estoppel arises when the principal's actions have created the appearance of an agency that does not in fact exist.

Accepted Answer

An agency by estoppel can occur when a principal's actions lead a third party to believe that an agency relationship exists, even if one has not been formally established. This can create obligations on the part of the principal towards the third party, even if no actual agency relationship exists.

Question 3

Anything that an agent obtains by virtue of the agency relationship is his or hers to keep.

Accepted Answer

Anything obtained by the agent belongs to the principal and not the agent, unless there is an agreement between them stating otherwise.

Question 4

An agent's deviation from the lawful clearly stated instructions of the principal is a violation of the duty of obedience.

Accepted Answer

The duty of obedience is one of an agent's fundamental duties to the principal, and it requires the agent to follow the principal's lawful and clearly stated instructions. Deviating from these instructions would be a violation of this duty.

Question 5

Whether a worker is an employee or an independent contractor has no effect on the employer's liability for the worker's actions.

Accepted Answer

The employer's liability for the worker's actions differs depending on whether the worker is an employee or an independent contractor. Employers have more control over employees and are therefore more likely to be liable for their actions, while independent contractors are responsible for their own actions.

Question 6

Under the law of agency,notice to the agent is notice to the principal.

Accepted Answer

This is a basic principle of agency law, which means that any notice given to the agent will be deemed as notice given to the principal.

Question 7

Implied authority is authority declared in clear,direct,definite terms.

Accepted Answer

Implied authority is authority that is not declared in clear, direct, definite terms, but is instead implied through an individual's actions and past patterns of behavior.

Question 8

Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies.

Accepted Answer

Yes, remedies of the agent for breach of duty by the principal follow normal contract and tort remedies. This means that the agent can take legal action against the principal for any breach of duty, such as non-payment of commission or failure to provide necessary resources. The agent may be entitled to damages, specific performance, or other remedies as determined by the court.

Question 9

Agency relationships can exist between employers and independent contractors.

Accepted Answer

Agency relationships can exist between employers and independent contractors if the employer has the right to control or direct the manner and means in which the independent contractor performs the work.

Question 10

The relationship between an employer and an employee cannot involve an agency relationship.

Accepted Answer

The relationship between an employer and an employee can involve an agency relationship when the employee acts on behalf of the employer and has the authority to make decisions and enter into agreements on behalf of the employer.

Question 11

Employment laws apply to the employer-independent contractor relationship.

Accepted Answer

Employment laws typically apply to the employer-employee relationship, not to independent contractors, who are considered to be in business for themselves.

Question 12

When the principal-agent relationship is contractual,the agent may have a right to specific performance.

Accepted Answer

When the principal-agent relationship is contractual, the agent's rights and obligations are explicitly mentioned in the contract. In such cases, if the principal breaches the contract or fails to comply with the terms of the contract, the agent can seek specific performance, which is a court order directing the principal to perform its obligations under the contract.

Question 13

An agent's duties to the principal are implied from the agency relationship only if the identity of the principal is disclosed to a third party.

Accepted Answer

An agent's duties to the principal are implied from the agency relationship regardless of whether the identity of the principal is disclosed to a third party. However, disclosing the principal's identity can affect the legal rights and liabilities of both the principal and the third party.

Question 14

The agent has the right to be indemnified.

Accepted Answer

An agent typically has the right to be indemnified or protected from any losses or damages incurred while carrying out their duties for the principal. This is usually outlined in the agency agreement or contract between the agent and principal.

Question 15

A principal has the right to control an agent's conduct in matters entrusted to the agent.

Accepted Answer

This is a fundamental principle of agency law. The principal has the right to give instructions to the agent and to limit the scope of the agent's authority. The principal is responsible for the actions of the agent in matters entrusted to the agent, so it is important for the principal to have a degree of control over the agent's conduct.

Question 16

Employers cannot avoid any tax liabilities by hiring independent contractors instead of employees.

Accepted Answer

Employers can reduce their tax liabilities by hiring independent contractors instead of employees because they are not responsible for paying payroll taxes (such as Social Security and Medicare taxes) on payments to independent contractors.

Question 17

A person does not need contractual capacity to be an agent.

Accepted Answer

The answer of A person does not need contractual capacity...

Question 18

Agency relationships normally are consensual.

Accepted Answer

Agency relationships are based on consent and agreement between the principal (client) and the agent (representative). Both parties must willingly enter into the relationship and agree on the terms and conditions of their arrangement.

Question 19

An agency relationship is enforceable even if it is created for a purpose that is contrary to public policy.

Accepted Answer

An agency relationship created for a purpose that is contrary to public policy is considered illegal and unenforceable.

Question 20

Through agents,a principal can conduct more than one business operation at a time.

Accepted Answer

Through agents, a principal can delegate authority to conduct multiple business operations simultaneously.

Quiz 19: Agency Relationships