Deck 25: Agency Law

Question 1

A principal can authorize an independent contractor to enter into contracts.

Answer 1

True

Question 2

An independent contractor is not an employee,even if he or she is authorized to enter into contracts on behalf of the principal.

Answer 2

True

Question 3

If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so,the settlement agreement is binding.

Answer 3

True

Question 4

Express agency contracts can be either oral or written unless the Statute of Frauds stipulates that they must be written.

Question 5

Express agency is the most common form of agency.

Question 6

An agency is a fiduciary relationship.

Question 7

An agency can arise in any of the following four (4)ways: 1)formal agency; 2)informal agency; 3)transparent agency; and 4)agency by certification.

Question 8

A principal-accessory relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Question 9

Agency relationships are formed by the mutual consent of an accessory and an agent.

Question 10

An agency results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control,and consent by the other so to act.

Question 11

An employee might or might not also be an agent of the employer.

Question 12

Soft Stuff,Inc.contracted to sell Mike's Mart five hundred cotton blankets.There is an agency relationship between Soft Stuff,Inc.and Mike's Mart.

Question 13

Employees may only enter into contracts that are within the scope of their employment.

Question 14

A party who employs another person to act on his or her behalf is called an authority.

Question 15

Principals are bound by the unauthorized contracts of their independent contractors.

Question 16

An employee is not an agent unless he or she is specifically empowered to enter into contracts on the principal employer's behalf.

Question 17

The extent of the agent's authority in a principal-agent relationship is governed by any express agreement between the parties and implied from the circumstances of the agency.

Question 18

In an agency,the agent acts on behalf of the third party.

Question 19

The president of a corporation usually has the authority to enter into major contracts on the corporation's behalf.

Question 20

An employee is an agent,even if he or she is not specifically empowered to enter into contracts on the principal-employer's behalf.

Question 21

A power of attorney is often used by a principal to give an agent the power to sign legal documents,such as deeds to real estate,on behalf of the principal.

Question 22

Powers of attorney must be in writing.

Question 23

Often even an express agency agreement does not provide enough detail to cover contingencies that may arise in the future regarding the performance of the agency.In this case,the agent possesses certain implied authority to act.This implied authority is sometimes referred to as supplemental authority.

Question 24

A power of attorney is one of the most formal types of implied agency agreements.

Question 25

An agency can be formed by the conduct of the parties.

Question 26

Through agency by ratification,the principal is bound to perform,and the agent is relieved of any liability for misrepresentation.

Question 27

A principal can ratify an agent's act before the agent's act occurs.

Question 28

In most states,a real estate broker's contract to sell real estate must be in writing.

Question 29

Implied authority is the authority that the third party may reasonably assume the agent possesses.

Question 30

An agency arrangement must be based on more than the conduct of the parties.

Question 31

Implied authority cannot conflict with express authority or with stated limitations on express authority.

Question 32

With regard to an implied agency,implied authority can be conferred by either industry custom,prior dealing between the parties,the agent's position and acts deemed necessary to carry out the agent's duties,or other factors a court deems relevant.

Question 33

In an express agency,the agent has the authority to contract or otherwise act on the principal's behalf,as stated in the agency agreement.

Question 34

Agency by indemnification occurs when (1)a person misrepresents himself or herself as another's agent when in fact he or she is not and (2)the purported principal ratifies the unauthorized act.

Question 35

If the principal and agent enter into an "exclusive" agency contract,the principal cannot employ any agent other than the exclusive agent.

Question 36

A durable power of attorney remains effective even though the principal is incapacitated.

Question 37

In a power of attorney relationship,the agent is called the attorney-in-fact even though he or she is not a lawyer.

Question 38

There are two (2)kinds of powers of attorney: 1)the express power of attorney; and 2)the implied power of attorney

Question 39

A special power of attorney limits the agent to those acts specifically enumerated by the agreement

Question 40

A general power of attorney confers broad powers on the agent to act in any matters on the principal's behalf.

Question 41

A principal's liability for the tort of an agent depends on the degree of disclosure of the agency relationship.

Question 42

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

Question 43

The principal will be held liable for any negligence of her agent committed during the time period the agent has agreed to act as agent.

Question 44

The principal and the agent are each personally liable for their own tortious conduct.

Question 45

Agency by estoppels arises when a principal creates the appearance of an agency that in actuality does not exist.

Question 46

Unless otherwise agreed,the principal owes a duty to cooperate with and assist the agent in the performance of the agent's duties and the accomplishment of the agency.

Question 47

Agents are generally permitted to engage in undisclosed self-dealing with the principal.

Question 48

The legal rule of imputed knowledge means that the principal is assumed to know what the agent knows.

Question 49

Where an apparent agency is established,the principal is estopped from denying the agency relationship and is bound to contracts entered into by the apparent agent while acting within the scope of the apparent agency.

Question 50

A principal is liable for the innocent,but not the intentional,misrepresentations made by an agent acting within the scope of employment.

Question 51

An agent who enters into a contract with a principal has two (2)distinct obligations: (1)to perform the lawful duties expressed in the contract; and (2)to meet the standards of reasonable care,skill,and diligence implicit in all contracts.

Question 52

The basic rule for whether the principal is liable for the negligence of an agent is whether the principal knew about the agent's commission of the tort.

Question 53

A principal owes a duty to indemnify the agent for any losses the agent suffers because of the principal's conduct.

Question 54

Apparent agency is also known as agency by estoppel.

Question 55

The agent's actions,not the principal's,create an apparent agency.

Question 56

Jon hired Sarah to manage his store.Sarah negligently hit Aimee with a shopping cart,injuring her as a result.Jon is liable to the customer.

Question 57

Agents are prohibited from competing with the principal during the course of an agency unless the principal agrees.

Question 58

If there is no agreement as to the amount of compensation to be paid the agent,the law implies a promise that the principal will pay the agent the customary fee paid in the industry.

Question 59

The doctrine of respondeat superior makes a principal liable for any tortious or criminal acts committed by the agent,in furtherance of the agency,that result in harm to others.

Question 60

An agent cannot usurp an opportunity that belongs to the principal.

Question 61

As a general rule,an agent is liable for contracts negotiated on behalf of a partially- disclosed principal.

Question 62

Assume Tom hires Mike as an independent contractor "security guard" for his apartment complex,but does not perform a background search,which would have revealed Mike's past "sexual predator" convictions.If Mike attacks Kathy,a tenant,Tom would not be liable,since Mike is an independent contractor.

Question 63

In order for a principal to be liable for the agent's negligence,the situation must meet the requirements of both the "motivation" and the "work-related" tests.

Question 64

An agent generally is not liable for contracts made in connection with a fully-disclosed agency.

Question 65

An agency can be designed to terminate upon the occurrence of an event that is outside the control of the agent or principal.

Question 66

The "frolic and detour" rule states that an agent is liable to the principal for damages resulting from the agent going on a frolic and detour.

Question 67

If an agent is driving his car to work from home and negligently causes an accident,the principal will not be liable for injuries caused by the agent's negligence.

Question 68

One characteristic of independent contractors is that they cannot enter into contracts on behalf of the principal.

Question 69

Undisclosed agencies are unlawful.

Question 70

The party who employs an independent contractor is called a principal.

Question 71

If an agency is terminated by agreement between the parties,the principal is not legally required to give any third party notice of the termination.

Question 72

Most jurisdictions hold both the principal and the agent liable if the agent injures someone while on a "dual-purpose mission."

Question 73

The most important factor in determining whether one who performs services for another is an independent contractor is the degree of control that the hiring party exercises over the party performing the work.

Question 74

Under common law,a principal generally is not liable for injuries caused by its agents and employees while they are on their way to or from work.

Question 75

If an agent exceeds the scope of his or her authority,the principal is not liable on the contract unless the principal ratifies it.

Question 76

A principal is always liable for the torts of an independent contractor.

Question 77

Allan hires a licensed independent contractor demolition company to level a building.If the demolition company takes every precaution,but a person is nevertheless injured,Allan is liable for the injury.

Question 78

The term respondeat superior means "let the master answer."

Question 79

If the principal labels someone an "independent contractor," then that conclusively determines whether independent contractor status exists.

Question 80

A partially-disclosed agency exists where the third party is aware that the party he is dealing with is an agent,but does not know the identity of the principal.