Question 1

Which of the following is a course of action for a principal if an agent is found competing with him or her?

Accepted Answer

If an agent is found competing with the principal, the principal can recover any profits made by the agent. This is because the agent has violated their duty of loyalty to the principal, which includes not competing with the principal during the agency relationship. The principal may also have the option of seeking an injunction to prevent further competition or terminating the agency relationship. However, the principal may not be able to recover damages for lost sales due to the agent's competing venture unless it can be proven that the agent's actions caused the lost sales. The option of buying the agent's competing venture may not be feasible or desirable for the principal.

Question 2

If a casting agent works for two Hollywood actors,the agent is liable for ________.

Accepted Answer

Dual agency occurs when an agent represents two parties with conflicting interests. In this case, the casting agent is representing two actors who may be competing for the same roles, which creates a potential conflict of interest. As such, the agent is liable for dual agency.

Question 3

Dual agency is permitted if all parties to a transaction agree to it.

Accepted Answer

Dual agency is allowed as long as all parties involved in the transaction consent to it. However, it is important to note that dual agency can create potential conflicts of interest and it is important for all parties to be fully informed of the risks and implications before agreeing to it.

Question 4

Undisclosed self-dealing by an agent is not regarded as violation of the duty of loyalty.

Accepted Answer

Undisclosed self-dealing by an agent is a clear violation of the duty of loyalty, as it involves the agent taking advantage of their position for their own benefit without disclosing it to their principal.

Question 5

Which of the following is a fiduciary duty owed by an agent not to act adversely to the interests of the principal?

Accepted Answer

The duty of loyalty requires an agent to act in the best interests of the principal and not act adversely to those interests. This duty includes not competing with the principal, not self-dealing, and fully disclosing all information to the principal. B, C, and D are not fiduciary duties.

Question 6

Which of the following is an instance of misuse of confidential information?

Accepted Answer

Option D is an instance of misuse of confidential information because the agent divulges private details of his past employer to his principal, which is a breach of confidentiality. Options A and C do not involve confidential information, and option B is a violation of the agent's privacy rather than misuse of confidential information.

Question 7

Why can an agent generally not take an opportunity meant for the principal? Is an agent ever permitted to take such an opportunity? Give an example of an agent's violation of the duty of loyalty.

Accepted Answer

The answer of Why can an agent generally not take...

Question 8

Which of the following is true of an agent's undisclosed self-dealing?

Accepted Answer

An agent's undisclosed self-dealing is a violation of the duty of loyalty. However, the principal does have the option to ratify the purchase and potentially waive any claim of breach of fiduciary duty. The principal can also rescind the purchase and seek damages from the agent. Therefore, option C is the correct choice, as it acknowledges the possibility of ratification.

Question 9

Dual agency occurs when an agent acts for two or more different principals in the same transaction.

Accepted Answer

Dual agency is when an agent represents both the buyer and seller in a real estate transaction. It is legal in some states but prohibited in others.

Question 10

Which of the following is true of dual agency?

Accepted Answer

Dual agency is only permitted if all parties in the transaction agree to it. This is because a dual agent owes fiduciary duties to both the buyer and the seller, which can create conflicts of interest. Therefore, it is important for all parties to be aware of and consent to the dual agency relationship. Option A is incorrect because an undisclosed dual agent is not allowed to retain compensation, as this would be a violation of the agent's fiduciary duties. Option B is incorrect because finders and middlemen are not necessarily dual agents, as they may not owe fiduciary duties to both parties. Option D is incorrect because the interests of both principals do not need to be similar for dual agency to be permitted, but rather all parties must agree to it.

Question 11

Agents can compete with the principal during the course of the agency if the principal agrees.

Accepted Answer

The principal can agree to let the agent compete with them during the course of the agency. However, this must be explicitly allowed and agreed upon in the agency contract. Otherwise, the agent would be breaching their duty of loyalty.

Question 12

A third-party offer to an agent must be conveyed to the principal.

Accepted Answer

As fiduciaries, agents are obligated to inform their principal of any offers from third parties.

Question 13

If an agent competes with the principal without the principal's permission,the principal may recover profits made by the agent.

Accepted Answer

This is a well-established rule in agency law known as the duty of loyalty, which requires agents to act solely in the best interests of their principals. If an agent competes with the principal or acts in a way that benefits themselves at the expense of the principal, they are in breach of this duty and may be liable to the principal for any profits made as a result.

Question 14

If an agent reveals confidential information of a principal to a third party,one of principal's courses of action may be to obtain an injunction against the third party.

Accepted Answer

This is correct. If an agent breaches their duty of confidentiality and reveals confidential information of a principal to a third party, the principal may seek legal remedies such as obtaining an injunction to prevent further disclosure of the confidential information.

Question 15

Which of the following statements is true of an agent taking an opportunity?

Accepted Answer

A principal is permitted to recover a usurped opportunity from an agent because agents have a fiduciary duty to act in the best interest of the principal and must not take opportunities meant for the principal for themselves.

Question 16

A principal has no course of action if an agent discloses his or her confidential information to a third party.

Accepted Answer

A principal can take legal action against an agent who breaches confidentiality and discloses confidential information to a third party. The exact course of action will depend on the specific circumstances and the terms of the agreement between the principal and agent.

Question 17

Harrison hires an agent to look for a three-bedroom house in Atlanta.Elaine,the agent,finds a three-bedroom house in Harrison's budget but buys it herself without informing Harrison.This is an instance of the agent's ________.

Accepted Answer

Elaine usurped an opportunity meant for Harrison by purchasing the house herself, which she was supposed to secure for him.

Question 18

An agent does not violate his or her duty of loyalty by serving two parties with the same interest.

Accepted Answer

The answer of An agent does not violate his or...

Question 19

Middlemen and finders are not considered dual agents.

Accepted Answer

Middlemen and finders are not considered dual agents because they do not represent both the buyer and the seller in a transaction. They simply introduce the two parties and facilitate communication between them.

Question 20

An agent owes a fiduciary duty not to act adversely to the interests of the principal.

Accepted Answer

This is a fundamental principle of agency law. The agent is expected to act in the best interests of the principal and not pursue their own interests or act in a way that could harm the principal's interests.

Quiz 30: Liability of Principals, agents, and Independent Contractors