Question 1

Ratification may occur with respect to either an act of an agent who has exceeded the authority given or an act by someone who has not been appointed an agent at all.

Accepted Answer

Ratification can apply to both situations.

Question 2

There can be ratification of an act done in the name of a corporation that was not in existence when the act was done.

Accepted Answer

False

Question 3

The test of an agent's implied authority is the:

Accepted Answer

An agent possesses the implied authority to do whatever else is reasonably necessary to accomplish the objectives of the agency. The test used by a court in determining the extent of the agent's implied authority is the justifiable belief of the agent.

Question 4

Ratification does not release the agent from liability to the principal and the third person for having exceeded his or her authority.

Accepted Answer

Ratification by the principal generally affirms the agent's actions and binds the principal to the terms of the agreement, thereby releasing the agent from liability for having exceeded authority, as the principal's ratification effectively approves those actions.

Question 5

An attorney-in-fact is the label given to an agent whose authority is:

Accepted Answer

Authority is express when the principal specifically describes the extent of the agent's powers. An attorney-in-fact is the technical label given to an agent whose authority is in writing.

Question 6

Authority is implied when the principal specifically describes the extent of the agent's powers.

Accepted Answer

Authority is not implied in this scenario; it is actually expressed or explicit when the principal specifically describes the extent of the agent's powers.

Question 7

Ratification gives the agent the same right to compensation that he or she would have had if there had been prior authorization.

Accepted Answer

Ratification means that the principal has given retroactive authorization for the agent's actions, therefore giving the agent the same right to compensation as if they had received prior authorization.

Question 8

Ratification may be inferred from the principal's failure to repudiate an unauthorized contract after becoming aware of it.

Accepted Answer

Ratification can be inferred if the principal is aware of an unauthorized contract but fails to reject it, indicating their acceptance of it.

Question 9

When an agent commits a tort or crime while working for the principal, the agent is not liable for the consequences of his actions if he is acting at the direction of the principal.

Accepted Answer

An agent can still be held liable for committing a tort or crime, even if they were directed to do so by the principal. The principal may also be held liable for the actions of their agent under certain circumstances.

Question 10

Any act that the principal could have authorized at the time the act was done may be ratified.

Accepted Answer

Ratification by definition is the affirmation or approval of a previously unauthorized act. Therefore, any act that the principal could have authorized at the time it was done can be ratified.

Question 11

The test of an agent's express authority is the:

Accepted Answer

Authority is express when the principal specifically describes the extent of the agent's powers. Generally, this may be done orally, although some states have statutes that require the authority of an agent who is to buy or sell land to be in writing. The test of an agent's express authority is the specific language the principal used in granting the authority.

Question 12

Only the entire act of the agent can be ratified; the principal may not ratify what is beneficial and deny what is burdensome.

Accepted Answer

This statement is true. When a principal ratifies an agent's actions, they must ratify the entire act, even if some parts of it are burdensome. They cannot pick and choose which parts to ratify based on their perceived benefits or burdens.

Question 13

Principals often are liable for the torts of their agents under the doctrine of res ipsa loquitur, which means "let the master answer."

Accepted Answer

The doctrine that holds principals often liable for the torts of their agents is "respondeat superior," not "res ipsa loquitur." "Res ipsa loquitur" is a legal doctrine used in tort cases to infer negligence from the very nature of an accident or injury, in the absence of direct evidence on how any defendant behaved.

Question 14

If an agent acts for a corporation that is not yet formed or for an entity that has no legal existence, such as an unincorporated association, the agent is not personally liable on a resulting contract.

Accepted Answer

If the corporation or entity is not yet formed or has no legal existence, the agent may be personally liable on a resulting contract. This is because there is no legal entity to assume responsibility for the contract.

Question 15

Express authority:

Accepted Answer

Authority is express when the principal specifically describes the extent of the agent's powers. Generally, this may be done orally, although some states have statutes that require the authority of an agent who is to buy or sell land to be in writing.

Question 16

An attorney-in-fact is the technical label given to an agent whose authority is in writing.

Accepted Answer

An attorney-in-fact is an agent who has authority granted in writing, such as through a power of attorney document.

Question 17

Apparent authority is the true authority granted to the agent by the principal.

Accepted Answer

Apparent authority refers to a situation where a third party reasonably believes an agent has the authority to act on behalf of the principal, even if such authority has not been explicitly granted.

Question 18

One may become liable through ratification for an unauthorized act that was done by an agent.

Accepted Answer

Ratification occurs when a principal approves or accepts an unauthorized act performed by an agent. This acceptance can make the principal liable for the consequences of the act.

Question 19

An agent can exercise his implied authority when:

Accepted Answer

The test used by a court in determining the extent of the agent's implied authority is the justifiable belief of the agent. Agents also have implied power to act in emergencies (sometimes called inherent agency power).

Question 20

Liability is imposed on an agent who has exceeded his authority on the basis of an implied warranty of merchantability.

Accepted Answer

The implied warranty of merchantability does not pertain to an agent's authority, but rather to the quality and fitness for use of goods sold by a merchant. Exceeding authority may result in liability based on other legal principles, such as breach of contract or negligence.

Quiz 24: Liability of Principals and Agents to Third Parties