Question 1

Trey,an agent for Uno Music Corporation,executes an unauthorized contract with Variety Recording,Inc.,that is highly advantageous to Uno.Variety withdraws from the deal before Uno ratifies the contract.The contract is

Accepted Answer

The answer of Trey,an agent for Uno Music Corporation,executes an...

Question 2

Clu serves in a representative capacity for Digger.Elmo is injured through Clu's negligence.Digger may be liable to Elmo if Clu's conduct occurred

Accepted Answer

If Clu was acting within the scope of his employment for Digger, then Digger may be vicariously liable for Clu's negligent conduct.

Question 3

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 4

Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Kompany.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 5

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

Since Bud did not have the authorization to enter into the contract on behalf of Cody and Cody did not ratify the contract, the contract is not enforceable. As a result, Dik's attempt to enforce the deal would be totally unsuccessful.

Question 6

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

Picabo is not acting within the scope of her employment when she crashed into a car while off duty. The other scenarios all involve Picabo being on the job or directly performing duties related to her job, which would fall within the scope of her employment.

Question 7

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 between Frida and Gert would be terminated by operation of law due to the destruction of the subject matter (i.e. the house burning down). The destruction of the subject matter makes it impossible to fulfill the terms of the agreement, thus terminating it. Additional consideration or not telling prospective customers would not change this. Mutual consent of the parties could terminate the agreement, but it is not stated as a factor in the question.

Question 8

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 consider whether

Accepted Answer

The fact that Brad indicated he was acting on behalf of Custodial is not determinative of whether he acted within the scope of his employment. The court will consider factors such as whether the act was authorized by Custodial, whether Custodial furnished the means by which the injury was inflicted, and whether the act is one commonly performed by employees for their employers.

Question 9

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 notebook computers and nothing else.Brenda shows the written authority to E-Products,Inc.,and enters into a contract with E-Products to buy sixty notebook computers and a selection of printers,scanners,and extra storage media.E-Products ships the order to Commodities.Is Commodities liable 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 10

Jock hires Kym to act as his agent to purchase Lifetime Gym & Fitness,Inc.Jock tells Kym to reveal that she is buying the firm on behalf of a third party and to tell Lifetime's seller who that third party is.Jock is

Accepted Answer

Jock is a disclosed principal because he has instructed Kym to reveal not only that she is acting on behalf of a third party but also to disclose who that third party (Jock) is to the seller.

Question 11

Tire Manufacturing Company employs Uri as an agent.To terminate Uri's authority,Tire Manufacturing must notify

Accepted Answer

To effectively terminate Uri's authority, Tire Manufacturing must notify both Uri and any third parties who are aware of the agency relationship. This is important to prevent Uri from continuing to act on behalf of Tire Manufacturing and to ensure that third parties are aware of the termination of the agency relationship. Notifying only Uri or only third parties who are aware of the relationship can lead to confusion and potential legal issues. There is no need to notify the public generally.

Question 12

Commercial Development Corporation (CDC)hires Delta Construction Company to work at a site as an independent contractor.Whether CDC will be liable for torts committed at the site by Delta depends on

Accepted Answer

Whether CDC will be liable for torts committed at the site by Delta depends on whether exceptionally hazardous activities are involved. If Delta is engaged in an inherently dangerous activity, CDC may be liable for any resulting harm, even if Delta is an independent contractor. The other options (A, C, and D) are not relevant factors in determining CDC's liability for Delta's torts at the site.

Quiz 28: Agency Relationships in Business