Question 1

Sonia manages a Tasty Pastry store for United Food Company.To manage the business,Sonia's authority can be implied by

Accepted Answer

Sonia's authority can be implied by her position as manager of the Tasty Pastry store, which is a position of authority within the company. This authority is implied by the responsibilities that come with the position, such as managing the store's operations, making decisions regarding inventory and pricing, and overseeing the work of employees. This implied authority is limited to the scope of Sonia's position as manager and does not extend to making decisions outside of that scope.

Question 2

George and James create an agency relationship to facilitate the sale of illegal narcotics.This agency relationship

Accepted Answer

The agency relationship to facilitate the sale of illegal narcotics is illegal. Both George and James are engaging in illegal activities, and any arrangement to facilitate the sale would be violating the law. Therefore, this agency relationship is not legal and can lead to criminal consequences for both parties.

Question 3

Mackenzie,an agent for Lindsay,signs an agreement with Kirk on Lindsay's behalf but ne-glects to tell her that the agreement requires the payment of a certain tax.The government prosecutes Lindsay for failing to pay the tax.She is

Accepted Answer

The answer of Mackenzie,an agent for Lindsay,signs an agreement with...

Question 4

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Accepted Answer

In this scenario, Nan's conduct has created a belief in Odel that Poppy has the authority to act on her behalf. This is known as apparent authority. Even though Poppy does not have actual authority, her actions and the circumstances have led Odel to believe that she does. Therefore, Poppy has apparent authority.

Question 5

Gayla asks Jessie to contract with Jessie's high school classmates to babysit for Gayla's new baby.Jessie orally agrees to do so.This is

Accepted Answer

An agency by agreement is formed when both parties agree, either orally or in writing, to establish an agency relationship. Here, Jessie orally agrees to contract with babysitters for Gayla, indicating mutual consent to form an agency relationship.

Question 6

Carol is married to Andy.Carol buys food for their children's lunches and charges the cost to Andy's account.This is

Accepted Answer

When a spouse purchases necessities for the family, it is often considered an agency by operation of law, as the law assumes the spouse has the authority to act on behalf of the other for such matters.

Question 7

Julia is an agent who purchases wool for Kara's Knitting Company.In the course of her performance for Kara's Knitting Company,Julia pays for the gas for the company car and for some storage boxes for the wool.Kara's Knitting Company must reimburse Julia because of the principal's

Accepted Answer

Kara's Knitting Company has a duty of reimbursement to Julia because she incurred expenses on behalf of the company while performing her duties as an agent. This duty of reimbursement is part of the principal-agent relationship.

Question 8

Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf.Edwina later contacts Frida to affirm the contract.This is

Accepted Answer

This scenario describes an agency by ratification, where Edwina affirms a contract entered into on her behalf by someone who was not her agent. By affirming the contract, Edwina is essentially ratifying the actions of Dizzy and accepting the terms of the agreement.

Question 9

Rita is appointed as an agent for Superior Sales,Inc.The agency agree-ment is silent as to the level of sales that Rita is expected to achieve.She must

Accepted Answer

Since the agency agreement is silent as to the level of sales that Rita is expected to achieve, Rita must use reasonable diligence and skill in selling. This is the standard of care that is generally expected of agents in the absence of any specific agreement. Therefore, option D is the best choice.

Question 10

Geoff serves in a representative capacity for Huck.To accomplish the objectives of this relationship,Geoff's authority can be implied

Accepted Answer

Implied authority is authority that is not expressly given, but that can be assumed based on the nature of the relationship and the parties' conduct. In this case, since Geoff serves in a representative capacity for Huck, it is reasonable to assume that he has implied authority to act on Huck's behalf. This type of authority can be based on custom or common practice within the particular industry or relationship.

Question 11

Sela agrees to act on Thom's behalf,subject to Thom's control,and Thom trusts Sela to so act.They set out the terms in a written document,which they both sign.This is

Accepted Answer

The written document that both parties signed outlines their agreement for Sela to act on Thom's behalf and is a clear indication of their intent to create an agency relationship. Additionally, Thom retains control over Sela's actions, which is a characteristic of an agency by agreement. The other options do not apply as there is no indication of reliance on Sela's actions (agency by estoppel) or ratification (approval of an unauthorized act), and it is clear that an agency relationship is indeed being created.

Question 12

Bob,a salesperson at a Carpets Galore store,tells Dita,a customer,"Buy your carpet here,and I'll install it for half of what the store would charge." Dita buys the carpet,which Bob in-stalls for half the store's price.Bob keeps the money.Bob has breached

Accepted Answer

Bob made a personal gain at the expense of the store he works for, breaching his duty of loyalty to the company. He used his position as a salesperson to offer a personal incentive that negatively impacted the store's revenue.

Question 13

Lather Up Soap Products Company grants its agent Kathy an exclusive terri-tory in which to sell Lather Up products.The firm cannot compete with Kathy in that territory under the principal's duty of

Accepted Answer

The principal's duty of cooperation requires them to not only provide the agent with exclusive territory but also to refrain from competing with the agent in that territory. This duty ensures that the agent has a fair opportunity to succeed in their sales efforts without the principal undercutting them. Therefore, the correct answer is B) cooperation.

Question 14

Cory employs Daily Delivery Agency as an agent under a writ-ten agreement that describes the rights and duties of both parties.This is

Accepted Answer

The agreement between Cory and Daily Delivery Agency specifically outlines the powers and responsibilities of both parties, which constitutes express authority. Apparent authority refers to the authority that others perceive an agent to have based on the agent's actions or the principal's conduct, while implied authority refers to authority that is not explicitly stated but is necessary for the agent to carry out their duties. Equal authority is not a recognized concept in agency law.

Question 15

Will is an agent for MaryElise.MaryElise gives Will clear instructions to only enter into contracts on Mondays,Wednesdays,or Fridays.Will enters into a contract on MaryElise's behalf on Tuesday.Will has breached

Accepted Answer

Will has breached the duty of obedience, which requires an agent to follow the principal's instructions and only act within the authority given to them. By entering into a contract on Tuesday, Will did not follow MaryElise's clear instructions to only enter into contracts on Mondays, Wednesdays, or Fridays.

Question 16

Ester is a lighting technician who hires out on a per-project basis to film and television production companies,as well as theatres and other venues that stage dramatic and musical performances.In this capacity,Ester is

Accepted Answer

Ester is hired on a per-project basis and is not an employee or agent of the production companies or venues. She is independent and controls her own work and schedule, making her an independent contractor. The fact that she hires out her services rather than being hired directly also supports this classification.

Question 17

Bernard is an expert on exotic flowers.Fine Floral Fixtures,Inc.(FFF) hires Bernard to order exotic flowers from various greenhouses.Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF.Bernard has breached

Accepted Answer

Bernard has breached the duty of performance by failing to exercise the care and diligence expected in his role when ordering flowers without examining their quality.

Question 18

Delite Candy Company hires Elton to sell Delite's products in a certain area.Delite agrees to pay Elton a salary,plus commission,for a trial period.They also agree that Elton can sell using any methods and during any hours that seem appropriate.The most important factor in whether Elton is Delite's employee is

Accepted Answer

The most important factor in determining whether Elton is an employee of Delite Candy Company is the amount of control that Delite has over the details of the work. In this case, the fact that Elton can use any methods and work during any hours that seem appropriate suggests that Delite does not have significant control over the work. If Delite did have more control over the details of the work, such as dictating specific hours or requiring certain sales techniques, it would be more likely that Elton would be considered an employee of the company.

Question 19

Rangle contracts with Siena to buy a certain horse for her.Rangle makes a deal with Timberline Stables,the owner of the horse,and makes a down payment.Siena fails to pay the rest of the price.Timberline sues Rangle for breach of contract.His right to hold Siena liable for any damages that he has to pay is the right of

Accepted Answer

Indemnification is the right to hold another party liable for any damages or losses incurred due to a breach of contract. In this case, Rangle is entitled to hold Siena liable for any damages she may have to pay to Timberline Stables due to her failure to pay the rest of the price for the horse. The other options (avoidance, cooperation, reimbursement) do not accurately describe Rangle's right in this scenario.

Question 20

Jim agrees to act on Kit's behalf,subject to Kit's control,and Kit trusts Jim to so act.This describes a relationship between

Accepted Answer

The relationship described is that of a principal and an agent. Jim is acting on behalf of Kit but is subject to Kit's control, indicating that Kit is the principal and Jim is the agent. This type of relationship is common in business, where an individual or entity (the principal) hires another person (the agent) to act on their behalf in certain matters.

Quiz 21: Agency Relationships