Exam 17: Agency and Franchising

Explain for each of the following statements whether the agent has liability to the third party. a.The agent enters into a contract on behalf of its principal with a third party.Unknown to the agent,its principal had died two months previously. b.The agent acts on behalf of an undisclosed principal.The agent acting on behalf of the principal enters into a contract with the third party.The contract is made in the agent's name,and the circumstances surrounding the contract show that the agent categorically described himself as a principal throughout the negotiations. c.The agent enters into a contract with the third party but represents himself neither as a principal nor an agent. d.The agent enters into a contact with the third party.Prior to entering the contract,the agent advised the third party that he was acting on behalf of a principal that did not wish to disclose its name at the present time.

A franchisor has a fiduciary duty towards the franchisee.

Albert is friends with Robert,the president of A.Co.When Albert hears about a lucrative deal with Y Co.that would benefit A Co. ,he immediately enters into a contract with Y Co. ,telling Y Co.that he is A Co.'s agent.When Albert tells Robert what he has done,Robert telephones Y.Co.and confirms the contract.In this case,as between A Co.and Y Co. ,

X Co.in Montreal retains Y as its purchasing agent to purchase goods from all over the world.If Y,having purchased goods in England,enters into an agreement with a shipping company to ship the goods to Montreal,

Happy Burgers is a successful fast food restaurant.Having decided to expand its operation,Happy Burgers decides to approach independent business people with the intention of licensing its operation to them,finding them a location for a Happy Burgers restaurant,setting up the restaurant,and training them in its operation.In return,they will pay Happy Burgers a royalty fee based on a percentage of their gross sales.This arrangement is an example of

The major difference between the franchisee-franchisor relationship and the agent-principal relationship is that only

James was an ordinary salesman for Bulldog Electric Ltd. ,but his business card read "Territory Manager." He had no authority to sell his company's products for a reduced price,yet he told a potential customer,"I'll give you a 10 percent reduction if you place an order today." Legally speaking,will the customer be able to get the reduced price should he sign the contract?

None of the contracts between the six independent manufacturer's agents and the ABC Company speak as to how the contracts can be terminated.All six agents have been doing a splendid job for several years in selling ABC's products.However,last week,ABC's board of directors decided to turn the selling function over to the company's own employees.This is to be completed within the next 30 days.Can the company's agency contracts with the independent agents be legally terminated,and if so,how?

Franchising agreements are typically standard form contracts prepared by the franchisor and presented to the franchisee on a take-it-or-leave-it basis.

A company that represents,either by words suggestive of that relationship or by acquiescing in similar contracts made for it by that person in the past,that someone is its agent,is permitted to deny any such relationship,upon the provision of notice.

How is the agency relationship used in a corporation and a partnership?

A entered into an agency agreement with agent B.B entered into a contract under seal with third party C.A was not named in the contract,but B described herself as "agent." Which one of the following statements is best applied to these facts?

How may the transaction known as consignment create an agency by estoppel?

Joe is appointed to sell a yacht on explicit instructions from the owner.Joe is acting with

An agency agreement comes to an end when the agent breaches the agreement.

Until yesterday,when X Co.fired Henry,Henry was employed as a purchasing representative,and over the time,he worked for X Co. ,Henry compiled an extensive list of X Co.'s customers.Henry,who is extremely angry over being fired,decides to get back at X Co. ,so he contacts X Co.'s largest supplier and on behalf of X Co.enters into a contract for the purchase by X Co.of 1 million dollars worth of goods that X Co.really has no need for.In this situation,

Edward is the president of Jones and Sons Ltd. ,Wholesalers (J&S).He recently hired George Cummings as his national marketing and advertising manager.Yesterday,Edward took George to a convention where,after a few drinks,he introduced George to the president of Sears as his national sales manager.The next day,after his hangover had subsided,Edward called the president of Sears and told him the truth about George.A couple of days later,George entered into a contract with Sears under which J&S sold 2 million dollars worth of furniture to Sears.J&S now refuses to honour the contract.If Sears sues J&S on the contract,

Identify which duty of agent to principal,if any,is being breached in the situations below. a.X,a valued client of the agent,requests the agent to attend a land auction and to bid on a specific piece of land if it is free and clear of encumbrances and restrictions.The agent,although not knowledgeable about auctions or real estate,attends and successfully bids on the property.However,the agent did not understand the legalese contained in a brochure given each of the bidders,which stated that the property the agent obtained would be subject to a restrictive covenant restricting the development and use of the property. b.The agent is instructed to attempt to purchase a specific piece of land and is authorized to offer up to $100 000 for same.The agent purchases the property for $85 000 and collects $95 000 from his principal,and in so doing advises the principal that the acquisition cost was $95 000. c.The principal retains agent X due to the agent's public reputation as an outstanding tax expert and requests that the agent attend a tax inquiry to represent him.X agrees to do this but instead delegates it to a sub-agent,who unsatisfactorily represents the principal. d.The principal instructs the agent not to pay more than $50 000 for a lot.The agent commits its principal to pay $60 000 for the lot.

Only independent contractors,not employees,can be agents.

If my son takes a luxury cruise without my permission and has the company send me the bill and I pay,I create the impression that I will always pay for this type of conduct.If I fail to inform the company that I will not pay again,this refers to the idea of