Deck 24: Law of Agency

Question 1

In agency law, what is one of the main types of relationships?

A) Landlord-tenant
B) Employer-independent contractor
C) Principal-third party
D) Employee-employee

Answer 1

Employer-independent contractor

Question 2

What is the nature of traditional agency relationships?

A) Fiduciary
B) Secretive
C) Indifferent
D) Antagonistic

Answer 2

Fiduciary

Question 3

In agency law, what term describes a person acting on behalf of a principal?

A) Independent contractor
B) Third party
C) Agent
D) Consignor

Answer 3

Agent

Question 4

When can an agent be liable on a contract to the third party?

A) When an agent acts without authority
B) When the principal wants to rescind the contract
C) When the third party wants to rescind the contract
D) When the principal filed for bankruptcy

Question 5

What is an example of agency relationship?

A) Andrew, without Bob's permission, rented an apartment for Bob's family
B) Bob hired Andrew and authorized him to rent an apartment for Bob's family
C) Andrew, a home owner, rented an apartment to Bob
D) All of the above

Question 6

What is an example of an independent contractor?

A) Editor working for a publishing company
B) Editor working for a newspaper
C) Editorial assistant working for a publishing company
D) Editor hired by a writer for editorial services

Question 7

When a third party deals with an agent and is not aware of the agency relationship, what term describes a principal?

A) Undisclosed principal
B) Unidentified principal
C) Anonymous principal
D) Unrevealed principal

Question 8

What legal entity may be created to take title to assets while safeguarding the owner's identity?

A) Fake corporation
B) Dummy corporation
C) Fictitious corporation
D) Phony corporation

Question 9

When a third party deals with an agent and is not aware of the agency relationship, between what people does privity of contract exist?

A) Third party and the principal
B) Third party, the principal, and the agent
C) Third party and the agent
D) No contract is made

Question 10

What term describes a person authorized to conduct all of a principal's activity in connection with a particular business?

A) Primary agent
B) Universal agent
C) Common agent
D) General agent

Question 11

What is an example of a special agent?

A) Ashley is authorized to sell Rick's log cabin
B) Miranda is authorized to harvest Bob's garden
C) Emma is authorized to trade Fred's car
D) All of the above

Question 12

What term describes a bailor leaving goods with a bailee who tries to sell them?

A) Consignor
B) Proprietor
C) Creditor
D) Promisor

Question 13

What Latin term means "doer"?

A) Gratis
B) Locus
C) Factor
D) Res

Question 14

How may an agent receive authority?

A) Orally
B) In writing
C) By a power of attorney
D) All of the above

Question 15

When a power of attorney is used, how is an agent referred to?

A) General agent
B) Attorney-in-fact
C) Legal agent
D) Del credere agent

Question 16

What is agency by estoppel?

A) Apparent authority
B) Implied authority
C) Express authority
D) Agency by ratification

Question 17

What term describes the improper doing of an act?

A) Malfeasance
B) Nonfeasance
C) Misfeasance
D) Mala prohibita

Question 18

What term describes the situation when employees' wrongdoings are imputed to their employer?

A) Indirect liability
B) Vicarious liability
C) Substituted liability
D) Liability by proxy

Question 19

What Latin phrase means "let the superior respond"?

A) Quid pro quo
B) Nolo contendere
C) Res ipsa loquitur
D) Respondeat superior

Question 20

What is the scope of employment?

A) Zone limited to the employee's stated job description
B) Zone broader than the employee's stated job description
C) Zone narrower than the employee's stated job description
D) Any place where an employee acts during his or her free time

Question 21

In business, one person often acts on behalf of another in dealing with third parties.

Question 22

In traditional agency relationships at least one party in the relationship owes a duty to act for the benefit of another.

Question 23

When an agent is authorized by the principal to enter into a contract on the principal's behalf, the resulting contract is between the agent and the third party.

Question 24

When a third party deals with an agent and is not aware of the agency relationship, the principal is known as a partially undisclosed principal.

Question 25

It is possible for a principal to conceal its identity even beyond being an undisclosed principal.

Question 26

In some states, an agent can be liable for a contract made on behalf of a partially disclosed principal.

Question 27

A special agent is a person authorized to carry out a single transaction.

Question 28

When goods are sold on consignment, they are left by a bailor with a bailee who tries to sell them.

Question 29

The bailee to whom the goods are consigned for sale is a principal.

Question 30

Agents' express authority may be done only in writing.

Question 31

In addition to express authority given to them, agents have some implied authority.

Question 32

Authority created when a principal makes it appear that an agent has authority when none actually exists, is called agency by ratification.

Question 33

Employer-employee liability was once referred to as the landlord-farmer rule.

Question 34

The scope of employment is always limited to the employee's stated job description.

Question 35

It is possible for volunteers to make their organizations vicariously liable.

Question 36

Traditional agency relationships are ________ in nature.

Question 37

The person with whom the agent deals is known as the ________ party.

Question 38

When a third party deals with an agent and is not aware of the agency relationship, the principal is referred to as a(n) ________ principal.

Question 39

A person performing services for others, but not under control of the hiring party, is called a(n) ________ contractor.

Question 40

The bailee to whom the goods are consigned for sale is a type of agent called a(n) ________.

Question 41

If the factor sells consigned goods on credit and guarantees to the consignor that the buyer will pay for them, the factor is known as a del ________ agent.

Question 42

When a power of attorney is used, the agent is referred to as a(n) ________.

Question 43

When an agent acts on behalf of a principal without authority to do so, but the principal later approves of the act, it is known as an agency by ________.

Question 44

Employers are responsible for the torts of their employees committed within the ________ of employment.

Question 45

The doing of an act that ought not to be done at all is called ________.

Question 46

Match the terms with their descriptions:

-Vicarious liability

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 47

Match the terms with their descriptions:

-Agency by estoppel

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 48

Match the terms with their descriptions:

-Consignment

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 49

Match the terms with their descriptions:

-Respondeat superior

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 50

Match the terms with their descriptions:

-Dummy corporation

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 51

Match the terms with their descriptions:

-Agent

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 52

Match the terms with their descriptions:

-Partially disclosed principal

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 53

Match the terms with their descriptions:

-Independent contractor

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 54

Match the terms with their descriptions:

-General agent

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 55

Match the terms with their descriptions:

-Express authority

A) Principal on whose behalf an agent is transacting with a third party, where the third party is aware the agent is acting as an agent but does not know who the principal is.
B) Person authorized to conduct all of a principal's activity in connection with a particular business
C) Authority given explicitly
D) Let the superior respond
E) Lawful corporation created to take title to assets while safeguarding the owner corporation's identity and liability
F) Apparent authority
G) Person acting on behalf of and under the control of, another person
H) Person performing services for others, but are not under the control of the hiring party
I) Liability imputed to employers because of the wrongdoings of their employees
J) Process of delivering goods to a bailee who attempts to sell them

Question 56

Define an agent and discuss an agent's liability on a contract to the third party.

Question 57

Identify and discuss an agent's express authority and implied authority.

Question 58

Define the doctrine of respondeat superior and discuss vicarious liability.

Question 59

Linda authorized Steven to buy rose bushes and raspberry bushes. Steven entered into contracts with Radiant Acres for the purchase of rose bushes, raspberry bushes, and strawberry plants. Then, without disclosing agency relationships, Steven entered into a contract with Paul and bought ten apple trees from him. Discuss who will be liable to third parties on contracts made by Steven.

Question 60

Martin works as a security guard at Carol's store that sells antique goods. Martin's job is to walk in the store and watch customers, making sure they do not steal anything. While he was walking in the store, he accidentally pushed a woman customer, who fell and broke her wrist. Discuss who will be liable for Martin's wrongdoing.