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Exam 32: Agency Formation and Duties

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Question 61

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Under the principles of agency law, any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store.

A) True
B) False

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Question 62

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Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act.

A) True
B) False

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Question 63

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Generally, the liability of a principal on a contract formed by an agent with a third party depends on whether the agent was authorized to act.

Pho enters into an exclusive agreement with Qin to find suitable property for Qin's enterprise. Later, Qin signs an exclusive agreement with Row for the same purpose. Neither agent knows about the other, and each expends reasonable efforts to perform. Qin buys a building through Pho. Most likely, Qin may be liable to Row for

Qin, the owner of Reprocess Plant, instructs Shi, a plant supervisor, to fill a storage tank with a chemical made by Toxins Inc. that, as both Qin and Shi know, will combust if combined with the substance previously stored in the tank. And, as they also both know, the tank has not been cleaned. Liability for any resulting harm or damage extends to

Curly Fries Inc. grants its agent Damon an exclusive territory in which to sell its products. The company cannot compete with Damon in that territory under the duty of

Using an agent provides benefits to a principal, without potential liability.

Yu contracts with Zach to buy a certain pub, Aficionado's, for Yu, who asks Zach not to reveal her identity. Zach makes a deal with Burke, the owner of the pub, and makes a down payment. Yu fails to pay the rest of the price, and does not pay Zach for his services. Does Zach have any recourse against Yu? If so, on what basis, and to what extent?

A principal has a duty to pay an agent in a timely manner the customary compensation for services rendered.

An undisclosed principal is not liable to a third party for failing to perform a contract entered into by an agent acting within the scope of his or her authority.

When an agent's acts create the appearance of an agency that does not in fact exist, the principal is estopped to deny the agency relationship.

Darya serves in a representative capacity for Ellen's Botanicals. To accomplish the objectives of this relationship, Darya's authority can be implied by

Luce is married to Marc. Luce buys food for their children's lunches and charges the cost to Marc's account. This is

The greater the employer's control over the work, the more likely it is that the worker is an employee.

Lorane, an attorney, contracts with Melos to incorporate the client's business. Their contract stipulates the amount of the fee. On completion of the work, the attorney's right to be paid this amount arises from the client's duty of

An event terminates an agency automatically when the occurrence of the event makes it impossible for the agent to perform.

Bern, a salesperson at Carpet Inc., tells Dan, a customer, "Buy your flooring here, and I'll install it for less than the company would charge." Dan buys carpeting, which Bern installs for half the firm's price. Bern keeps the money. With respect Carpet Inc., Bern has breached

The rationale for the doctrine of respondeat superior is based on the social duty that requires each of us to manage our affairs so as not to injure others.

Without authorization, Race contracts on behalf of Sophie to have Theo paint Sophie's Boutique. If Sophie decides to ratify the contract, she must affirm

Julia agrees to act as Kale's agent to negotiate, in Kale's presence, a sale of Kale's ranch. A contract for a sale of land must be in writing. The agreement between Julia and Kale