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Exam 17: Agency

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Question 41

Multiple Choice

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Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by

A) an inference from the position Sonia occupies.
B) any inference a reasonable customer or supplier would make.
C) any inference Sonia chooses to make.
D) no inference.

E) A) and B)
F) A) and C)

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Question 42

Multiple Choice

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Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on

A) any transaction causing a loss to Miklos.
B) Miklos's death or incapacity.
C) Miklos's sixty-fifth birthday.
D) Nathalie's handling of one of each stipulated transaction.

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

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Question 43

True/False

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A principal has the right to control an agent's conduct in matters entrusted to the agent.

A principal who causes a third person to believe that another person is the principal's agent can be estopped from denying the agency relationship.

Principal Resources Corporation contracts with Quality Construction to build an addition to Principal's corporate office building. Quality contracts with Rite Supply Company for materials for the addition but refuses to pick up the materials. Meanwhile, Principal hires Skye, a certified public accountant, to work in its cost-accounting division as an employee, with no authority to hire or supervise others. Skye asks Theo, an outside experienced accountant, to advise her on certain accounting procedures but fails to pay Theo for the service. Principal also contracts with Uma, a salesperson, to solicit orders for its products in a designated territory. Uma obtains an order from Verity Industries, Inc., which is assured the order will be filled soon. But Uma does not follow through with the paperwork and fails to submit the order to Principal. Verity suffers a loss. Rite Supply, Theo, and Verity Industries claim Principal is liable under agency law. Discuss fully whether an agency relationship was created by Principal with Quality Construction, Skye, or Uma.

Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has

Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house burns down before being sold. The agency agreement is likely

If a principal does not ratify an unauthorized contract, the principal is not bound.

It is basic tenet of agency law that notice to the agent is notice to the principal.

Cory employs Daily Delivery Agency as an agent under a writ?ten agreement that describes the rights and duties of both parties. This is

Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the

Authority declared in clear, direct, definite terms is express authority.