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Exam 10: Agency Liability and Termination

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Question 1

True/False

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A principal is not normally liable for the crime of an agent committed within the scope of the agency or employment.

A) True
B) False

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Question 2

Multiple Choice

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OnlineSales.com uses an e-agent to take a purchase order from a consumer over the Internet. The e-agent fails to provide an onscreen confirmation of the order. The effect of any error in the order can be avoided by​

A) ​OnlineSales.com.
B) ​the consumer.
C) ​both parties.
D) ​none of the choices.

E) B) and D)
F) A) and B)

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Question 3

Multiple Choice

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

A partially disclosed principal is only partially liable to a third party for a contract made by an agent.

Private Security Service employs Olsen as an agent. Without Private Security's knowledge but otherwise acting within the scope of employment, Olsen commits a crime. The state can successfully prosecute​

Under the doctrine of respondeat superior, an agent is liable for any harm caused to a principal by a third party.

A principal may be liable if he or she gives improper instructions that result in the agent's committing a tort.

Beth, acting within the scope of her authority for the Cake Bake Shop, contracts with Eden Valley Orchards to buy an assortment of fruit. Cake Bake is liable on the contract, and Beth is not, if Cake Bake is​

If the principal petitions for bankruptcy, the agency is usually terminated.

Romero employs Supplies Procurement Service as an agent under a written agreement that describes the rights and duties of both parties. This is​

A principal is not bound to an unauthorized contract unless the principal ratifies it.

Giving an agent a power of attorney confers express authority.

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​

Without authorization, Lars contracts on behalf of Mina to have Nemo paint the interior and exterior of Mina's house. If Mina decides to ratify the contract, she must affirm​

Ben manages a warehouse and its inventory for Coffee Shops, Inc. To operate this part of the business, Ben's authority can be inferred​

If a principal is disclosed, the agent may be liable to a third party for the principal's nonperformance of a contract.

Cropland Farms, LLC, hires Desiree to act as its agent to buy a certain tract of land from Ethan for $1,000 per acre. Cropland Farms does not want Ethan to know that it is the principal or that Desiree is its agent. Cropland Farms wants the land to test genetically modified seed products, and believes that Ethan may not sell the land for that purpose, or may demand a premium price if he knows that Cropland Farms is the buyer. Desiree makes the purchase, signing only her name to the contract as the buyer and not disclosing to Ethan the agency relationship. The transfer of the deed is to occur on June 1. Ethan learns of Cropland Farms's identity on May 15. Can Ethan legally refuse to deed the property on June 1? Explain.

Metro Hospital, Inc., employs New Collection Company as an agent for the collection of Metro's unpaid accounts. While garnishing O'Shea's wages, New Collection misstates the amount and collects too much. O'Shea can recover from​

Lima, an agent for Mindwonder Games LLC, executes an unauthorized contract with NOW Marketing Inc. The deal is highly advantageous to Mindwonder, and the company ratifies the contract. The contract is​

Based on Esteban's conduct,Floyd reasonably believes that Glynis has the authority to act on Esteban's behalf even though Glynis does not have the actual authority to do so. Floyd makes a payment to Glynis for Esteban. Glynis keeps the money and disappears. Esteban​