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Exam 20: Agency and Liability to Third Parties

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Question 31

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Insolvency automatically results in termination of an agency relationship.

A) True
B) False

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Question 32

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Which of the following factor(s) is/are considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?

A) Whether the employer authorized the employee's act.
B) Whether the employer provided the tools by which the act occurred.
C) Whether the employer knew that the act would involve the commission of a serious crime.
D) Whether the employer authorized the employee's act,whether the employer provided the tools by which the act occurred,and whether the employer knew that the act would involve the commission of a serious crime.
E) Whether the employer authorized the employee's act and whether the employer provided the tools by which the act occurred,but not whether the employer knew that the act would involve the commission of a serious crime.

F) B) and C)
G) A) and B)

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Question 33

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The principal must assist the agent in the performance of his or her duties,and the principal can do nothing to interfere with the reasonable conduct of the agent.This is known as the duty of indemnification.

Which of the following is another name for an apparent agency?

Expressed agency is also known as agency by ________.

Which of the following is a doctrine used in the context of the principal/employer-agent/employee relationship?

A fiduciary is a person who has a duty to act primarily for another person's benefit.

An agent's obligation to act in the interest of the principal is known as the duty of performance.

When an agency relationship is not contractual or the contract is for personal services,the agent ________.

Which of the following is true if an agent has no actual or apparent authority to act on behalf of a principal but the agent still enters into a contract with a third party?

Cheap Principal.Jason,who is very knowledgeable regarding computers,agrees to purchase computers for Nick's business.Jason is retained for that purpose only,he is paid a set rate for the job,and Nick exercised no control over the manner in which Jason did his work.Jason purchased computers on credit from ABC Computers without any mention of Nick.The computers worked well and were not defective in any way.Unfortunately,Nick did not pay ABC Computers on a timely basis.Jason,therefore,paid ABC Computers out of his own pocket because he wanted to be able to do business with ABC in the future and because his name was on the invoice.Jason asked Nick for reimbursement,but Nick refused.Nick claimed that if Jason had only waited,ABC Computers might have agreed to take less.Which of the following likely represents Jason's status regarding his employment with Nick?

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.Which of the following is the most likely result if Sue sues Ronnie for purchasing the property from Bruce?

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 Bob brought by Spencer?

Not only does the agent have to communicate offers from third parties,but the agent must also communicate any information the agent thinks could be important to the principal.This is known as the duty of collaboration.

When an agent acts within the scope of her authority on behalf of a disclosed or partially disclosed principal,the agent is liable for the acts of the principal.

A gratuitous agent is one who acts without ________.

A document that gives an agent the authority to sign legal documents on behalf of the principal is known as a(n) ________.

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 Harry sues Paul for the price of the jacket?

Which of the following is the term used to describe the duty an agent has to follow the lawful instruction and direction of the principal?

Which of the following was the result on appeal in Iglesia Cristiana La Casa Del Senor,Inc.,Etc.v.L.M.,the case in the textbook involving the issue of whether a church was liable,pursuant to the doctrine of respondeat superior,for a sexual assault allegedly committed by a church pastor?