Question 1

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

Accepted Answer

This is an agency by ratification. Dizzy acted as if he had authority to enter into a contract on Edwina's behalf, and Frida reasonably believed that he did. When Edwina later approved the contract, this amounts to a retroactive grant of authority to Dizzy to act as her agent in this instance, making it an agency by ratification. This is different from agency by agreement, where both parties explicitly agree to the agency relationship, and agency by estoppel, where the principal's actions or inaction lead a third party to reasonably believe that an agency relationship exists.

Question 2

Elle is an agent for Fine Cosmetics,Inc.Elle owes Fine Cosmetics the duty of

Accepted Answer

As an agent for Fine Cosmetics,Inc., Elle owes the duty of performance, which means she is responsible for carrying out the tasks assigned to her by Fine Cosmetics to the best of her ability. This includes following instructions, making decisions that align with Fine Cosmetics' goals and objectives, and acting in a trustworthy and loyal manner towards the company. Compensation, indemnification, and avoidance are not duties owed by the agent to the principal.

Question 3

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

Apparent authority is the authority that a reasonable third party believes an agent has based on the actions or conduct of the principal, even though the principal never actually gave the agent such authority. In this scenario, Odel reasonably believes that Poppy has the authority to act on Nan's behalf based on Poppy's conduct, which means Poppy has apparent authority.

Question 4

Louis,a certified public accountant and an investor,and Maria,an insurance salesperson and a realtor,may create an agency relationship for

Accepted Answer

The answer of Louis,a certified public accountant and an investor,and...

Question 5

Home Development Company employs llya to buy property for a future residential development.Ilya secretly buys some of the property and sells it to Home Development at a profit.Ilya has breached

Accepted Answer

Ilya breached the duty of loyalty by secretly buying and selling the property to Home Development, his employer. As an employee, Ilya owed a fiduciary duty of loyalty to his employer, which includes not engaging in any activities that would conflict with the interests of the employer. By secretly buying and selling the property to his employer, Ilya put his own interests ahead of the employer's, which is a breach of the duty of loyalty.

Question 6

Based on Bluto's conduct,Cass reasonably believes that Dee has the authority to act on Bluto's behalf even though Dee does not have the actual authority to do so.Cass makes a payment to Dee for Bluto.Dee keeps the money and disappears.Bluto

Accepted Answer

This situation describes the concept of apparent authority, where someone appears to have the authority to act on behalf of another person, even if they do not have actual authority. Cass reasonably believed that Dee had the authority to act on Bluto's behalf based on Bluto's conduct. Therefore, Bluto may be estopped (prevented) from denying that Dee had authority, and may not be able to demand repayment directly from Cass or obtain damages from Cass for Dee's misconduct.

Question 7

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 key factor in whether Elton is Delite's employee is

Accepted Answer

The key factor in determining whether Elton is Delite's employee is the amount of control that Delite has over the details of his work. In this case, Delite has given Elton flexibility in his methods and hours, but if they still have control over the details of the work, such as what products he sells, how he sells them, and where he sells them, then he is likely an employee. The other factors mentioned (salary amount, trial period length, and position title) do not necessarily determine employee status on their own.

Question 8

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

Accepted Answer

The written agreement between Cory and Daily Delivery Agency expresses the authority granted to the agency, making it express authority.

Question 9

Lather Up Soap Products Company grants its agent Kathy an exclusive territory 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 10

Jody is an agent for Insta Cross Country Trucking Inc.In the course of Jody's performance for the firm,Jody pays Heck for certain vehicle maintenance and repair services.Jody's right to obtain the amount of those payments from Insta arises under the principal's duty of

Accepted Answer

Jody is entitled to reimbursement from Insta Cross Country Trucking Inc. for the payments made to Heck for vehicle maintenance and repair services. This right to reimbursement arises under the principal's duty of reimbursement, which requires the principal to compensate the agent for expenses reasonably incurred while fulfilling their duties on behalf of the principal.

Question 11

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

Accepted Answer

Since the agency agreement is silent on the level of sales Rita is expected to achieve, the implied duty is for her to use reasonable diligence and skill in her selling efforts. She has a duty to act in good faith and do her best to promote Superior Sales, Inc.'s products or services. Therefore, option D is the best answer.

Question 12

Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

Accepted Answer

An ordinary power of attorney granted by Miklos to Nathalie will terminate on Miklos's death or incapacity, as this is a common limitation for ordinary powers of attorney. The other choices provided are not common reasons for terminating an ordinary power of attorney.

Question 13

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

Accepted Answer

When authority is implied, it is usually based on custom. In this case, the custom is that a representative serves as an agent for the person or company they represent.

Question 14

Lenore is the sole proprietor of Mall Kiosks.With respect to contracting for her own business interests,Lenore is

Accepted Answer

As the sole proprietor of her business, Lenore is not considered an agent because she is not representing another party. However, she does have the authority to contract for her own business interests because she is the owner and decision maker for her business.

Question 15

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 binding in its entirety. Attempting to rescind a part of the contract after ratification would be considered a breach of contract, and would be unsuccessful in voiding the portion of the contract relating to the exterior painting.

Question 16

Kady,an agent for Lebron,enters into a contract on Lebron's behalf with Madge that must be in writing to be enforceable under the Statute of Frauds.Kady's authority to enter into this contract is not in writing.Under the equal dignity rule,this contract is

Accepted Answer

The answer of Kady,an agent for Lebron,enters into a contract...

Question 17

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 installs for half the store's price.Bob keeps the money.Bob has breached

Accepted Answer

Bob has breached the duty of loyalty by offering a personal discount to a customer that goes against the store's pricing policies and keeping the money for himself. This is a conflict of interest and a breach of his obligation to act in the best interests of his employer.

Question 18

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 the position she occupies as a manager of the Tasty Pastry store. As a manager, she has the authority to make decisions and manage the store's operations. It is implied by her job title and responsibilities. The other options are not appropriate as they do not accurately reflect the source of Sonia's authority.

Question 19

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 situation describes an agency by agreement, as Sela is acting as Thom's agent with his control and consent, and they have both signed a written agreement outlining the terms of the agency relationship.

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

This scenario describes a principal-agent relationship, where Kit is the principal and Jim is the agent. Kit has entrusted Jim with the authority to act on his behalf, subject to his control. This is a common relationship in business and legal transactions, where one party (the principal) delegates authority to another party (the agent) to act on their behalf in certain matters.

Quiz 16: Agency