Question 1

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

When Joli contracts with Valley View Berry Farms within the scope of her authority as an agent for Cake Bake Shop, Cake Bake Shop is liable on the contract as a disclosed principal. This means that Valley View Berry Farms knows they are contracting with a third party, and Joli is not personally liable for the contract.

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 agency will terminate after the condos have been sold, as that is the primary purpose of hiring Gulfview Brokerage Associates. The termination is not contingent on price reductions or insurance coverage, but rather on the completion of the sales process. Payment of commission is a separate matter from the termination of the agency relationship.

Question 3

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 con?sider whether

Accepted Answer

In determining whether an employee acted within the scope of employment, the court will not consider whether the employer was personally at fault. The focus is on whether the employee's actions were authorized or within the scope of their employment duties.

Question 4

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 note?book 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 li?able 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 5

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 ensures that Uri and all relevant parties are aware that the agency relationship has been terminated and that Uri no longer has the authority to act on behalf of Treadwell.

Question 6

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 7

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 8

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

Accepted Answer

The power given to Nathalie will terminate upon Miklos's death or incapacity, which is a common provision in powers of attorney.

Question 9

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 due to the destruction of the subject matter (the house). The agency agreement was contingent upon Frida having a house to sell, and since the house no longer exists, the agreement is automatically terminated. No additional consideration or mutual consent is needed.

Question 10

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 re?lat?ing to the exterior. This attempt will be

Accepted Answer

Sari ratified the contract without any reservations, meaning she fully accepted the terms of the contract. Therefore, she cannot rescind part of the contract after the fact. The contract is binding in its entirety, and Sari cannot selectively remove portions of it.

Question 11

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

Bud did not have the authority to approve the contract on Cody's behalf without authorization. Therefore, Cody is not bound by the contract, and Dik cannot enforce it against him. The contract is considered void ab initio (from the beginning), and Dik's attempt to enforce it will be totally unsuccessful.

Question 12

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...

Quiz 28: Agency Relationships in Business