Question 1

Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Company.Iggy tells Joy to reveal only that she is buying the firm on behalf of a third party, without telling Kup-a-Koffee's seller who that third party is.Iggy is

Accepted Answer

The answer of Iggy hires Joy to act as his...

Question 2

Bayou Development Corporation (BDC) hires Gulfview Brokerage Associates to sell the condominiums in a building at BDC's coastal resort.The agency will terminate

Accepted Answer

The termination of the agency will be based on the completion of the task assigned, which is selling the condominiums. Once all the condos are sold, Gulfview Brokerage Associates will no longer have a reason to continue the agency with BDC.

Question 3

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

Accepted Answer

The power granted to Nathalie to handle financial transactions on Miklos's behalf will terminate upon Miklos's death or incapacity.

Question 4

Principal Resources Corporation contracts with Quality Construction to build an addition to Principal's corporate office building.Quality contracts with Rite Supply Company for materials for the addition but refuses to pick up the materials.Meanwhile, Principal hires Skye, a certified public accountant, to work in its cost-accounting division as an employee, with no authority to hire or supervise others.Skye asks Theo, an outside experienced accountant, to advise her on certain accounting procedures but fails to pay Theo for the service.Principal also contracts with Uma, a salesperson, to solicit orders for its products in a designated territory.Uma obtains an order from Verity Industries, Inc., which is assured the order will be filled soon.But Uma does not follow through with the paperwork and fails to submit the order to Principal.Verity suffers a loss.Rite Supply, Theo, and Verity Industries claim Principal is liable under agency law.Discuss fully whether an agency relationship was created by Principal with Quality Construction, Skye, or Uma.

Accepted Answer

The answer of Principal Resources Corporation contracts with Quality Construction...

Question 5

Joli, acting within the scope of her authority for the Cake Bake Shop, contracts with Valley View Berry Farms to buy an assortment of fruit.Cake Bake is liable on the contract, and Joli is not, if Cake Bake is

Accepted Answer

If Cake Bake is a disclosed principal, then Joli acted within her authority as an agent for Cake Bake and Cake Bake is liable on the contract.

Question 6

Frida hires Gert, a real estate broker, to act as her agent to sell her house.The house burns down before being sold.The agency agreement is likely

Accepted Answer

The agency agreement is terminated by operation of law as the subject matter of the agreement (the house) no longer exists.

Question 7

Treadwell Tire Manufacturing Company employs Uri as an agent.To terminate Uri's authority, Treadwell must notify

Accepted Answer

Treadwell must notify Uri and any third parties who are aware of the agency relationship to terminate Uri's authority. This is necessary to avoid any potential legal issues or confusion about Uri's continued role as an agent for Treadwell. It is not necessary to notify the public generally, as they may not be aware of the agency relationship or have any direct dealings with Uri on behalf of Treadwell. Similarly, notifying only third parties who are aware of the agency relationship may not be sufficient as there may be other parties who are not aware of the relationship and could be misled.

Question 8

Brad is an employee of Custodial Service, Inc.In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi, a court will not consider whether

Accepted Answer

Whether Custodial was personally at fault is not relevant to determining whether Brad acted within the scope of his employment. The focus is on Brad's actions and whether they were within the scope of his job duties or authorized by Custodial.

Question 9

Brenda is a purchasing agent for Commodities Exchange Corporation.Dennis, a Commodities corporate officer, gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary.The next day, Dennis calls Brenda and tells her to buy only fifty notebook computers and nothing else.Brenda shows the written authority to E-Products, Inc., and enters into a contract with E-Products to buy sixty note-book computers and a selection of printers, scanners, and extra storage media.E-Products ships the order to Commodities.Is Commodities liable to E-Products under the contract? Is Brenda liable? In each case, if so, why? If not, why not?

Accepted Answer

The answer of Brenda is a purchasing agent for Commodities...

Question 10

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo.Cody does not ratify the contract.Later, Dik tries to enforce the deal.This attempt will be

Accepted Answer

Since Bud did not have authorization to approve the contract on behalf of Cody, and Cody did not ratify the contract, the contract is considered void and unenforceable. Therefore, Dik's attempt to enforce the deal will be totally unsuccessful.

Question 11

Picabo drives a truck as an employee for Quik Delivery, Inc.Picabo would most likely be considered acting outside the scope of her employment if she

Accepted Answer

The answer of Picabo drives a truck as an employee...

Question 12

Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house.Sari ratifies the contract.Later, Sari tries to rescind the part of the contract relating to the exterior.This attempt will be

Accepted Answer

Once Sari ratified the contract, it became legally binding and enforceable. Rescinding a part of a contract after it has been ratified is only possible if both parties agree to the rescission, which is unlikely in this scenario. Therefore, Sari's attempt to rescind the part of the contract relating to the exterior will be totally unsuccessful.

Quiz 16: Agency Relationships