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Exam 20: Agency and Liability to Third Parties

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Question 51

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What is the duty of accounting an agent owes to a principal,and how would an agent satisfy that duty? Specify what actions an agent must take with regard to the accounts of a principal.

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Under the duty of accounting,the agent m...

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Question 52

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Under which of the following does a principal give authority to an agent only for the specific areas or purposes listed in the agency agreement?

A) A general power of attorney
B) A specific power of attorney
C) A localized power of attorney
D) A durable power of attorney
E) An equitable power or attorney

F) All of the above
G) D) and E)

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Question 53

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Lakeside Property.Ronnie agreed to act as Sue's agent in finding a piece of lakeside property for her at a good price and in obtaining a loan for her with which to purchase the property.She agreed to pay him $500 for doing so.To assist Ronnie in his duties,Sue disclosed to Ronnie confidential information about her finances and debts.Ronnie decided that he needed help and paid Rick $300 to look for property for Sue.Bruce told Ronnie about a great deal on a piece of lakeside property that Bruce had for sale.In fact,the deal was so good that Ronnie purchased the property for himself.When Sue found out about the property Ronnie bought for himself,she complained to Ronnie.He defended himself on the basis that he was not actually working for Sue when he found out about the deal.At the time,he was playing golf with Bruce.He also told Sue that he had hired Rick for $300 to assist him and that he could not be held liable because he had turned the job over to Rick.He asked Sue for reimbursement of that amount.Sue fired Ronnie,threatening to sue him.Ronnie told Sue that he would counterclaim for the $300 owed to Rick.Only after he was fired,Ronnie disclosed to a number of parties information regarding Sue's spending habits that he thought were excessive.What remedy should Sue seek if she wants possession of the lakeside lot Ronnie purchased?

Roofing Issues.Sally agrees to roof a house for Bob.After doing his research,Bob chooses Sally based on her great reputation for being conscientious and doing good work.Bob knows little about roofing and stays away from all the noise involved.Sally provides her own tools for herself and other workers,sets her own schedule,and charges a flat rate of $10,000 to be paid when the job is completed.Sally hires Trudy,Glen,and Fred to help with the roofing.She pays them an hourly rate,supervises their work,provides them with tools and materials,and sets their schedules.Curious about what is going on there,Bob's friend Spencer walks by the house while the roofing is being done.Glen absentmindedly throws some old shingles off the roof and hits Spencer in the head,resulting in him going to the local emergency room and receiving a couple of stitches in his scalp.Spencer decides to sue all the roofers,Bob,and Sally for his hospital expenses and for pain and suffering.Which of the following is the most likely characterization of Sally in relation to Bob?

Persons who are not employees but who are hired by employers to perform certain tasks are known as:

Which of the following is the most common type of agency?

How long does an agent's apparent authority continue once an agency relationship is terminated?

What does the Latin phrase respondeat superior mean?

While an agent owes duties to a principal,a principal owes no duties to an agent.

Which of the following is true under the Uniform Commercial Code regarding the liability of a principal to an agent if the agent enters into a contract that is a negotiable instrument?

A gratuitous agent is one who acts without consideration.

Singapore has outlawed the use of electronic contracts.

Roofing Issues.Sally agrees to roof a house for Bob.After doing his research,Bob chooses Sally based on her great reputation for being conscientious and doing good work.Bob knows little about roofing and stays away from all the noise involved.Sally provides her own tools for herself and other workers,sets her own schedule,and charges a flat rate of $10,000 to be paid when the job is completed.Sally hires Trudy,Glen,and Fred to help with the roofing.She pays them an hourly rate,supervises their work,provides them with tools and materials,and sets their schedules.Curious about what is going on there,Bob's friend Spencer walks by the house while the roofing is being done.Glen absentmindedly throws some old shingles off the roof and hits Spencer in the head,resulting in him going to the local emergency room and receiving a couple of stitches in his scalp.Spencer decides to sue all the roofers,Bob,and Sally for his hospital expenses and for pain and suffering.Assuming Glen was negligent,which of the following is the most likely result in a lawsuit against Sally brought by Spencer?

An individual who lacks contractual capacity may hire an agent to make contracts on his or her behalf.

Agency is generally defined as a relationship between a principal and a third-party beneficiary.

The principal-employer holds ________ liability for any harm caused by the agent-employee during the time that the agent-employee is working for the principal.

A person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking is an ________.

An agency agreement created for the agent's benefit,not for the principal's,is ________.

Which of the following is false regarding a principal's duties to an agent?

High Maintenance.Paul,who runs a retail jewelry store,went with Jane,to whom he was engaged to be married,to a wholesale jewelry store.Paul had no express,written agreement with Jane by which she was his agent.In fact,Paul had told Jane not to buy anything at the store.The wholesale jeweler,Pam,asked Paul if Jane was buying for him.Paul did not want to embarrass Jane so he nodded in agreement.A few minutes later Paul reminded Jane,outside the hearing of the wholesaler,that she should not make any purchases.Paul and Jane had a big disagreement over money that evening,and Jane broke off their engagement.The next day Jane went back to the wholesale jeweler and purchased a string of pearls for $2,000.Jane also purchased a fur jacket for $3,000 from a store owned by Harry that was next door to the jewelry store.She told Harry that Paul wanted a fur jacket for a model in his store and that Paul would be glad to pay Harry for the jacket.Which of the following is the most likely result if Pam,the wholesale jeweler,sues Paul for the price of the pearls?