Exam 25: Agency Law

If there is no agreement as to the amount of compensation to be paid the agent,the law implies a promise that the principal will pay the agent the customary fee paid in the industry.

The death of either the principal or the agent terminates the agency relationship.

An independent contractor is not an employee,even if he or she is authorized to enter into contracts on behalf of the principal.

A principal's liability for the tort of an agent depends on the degree of disclosure of the agency relationship.

Why would an agent not disclose the existence and identity of the principal when negotiating a contract,given that doing so would avoid agent liability on the contract? What should an agent do when the principal does not want to be disclosed?

If an agency is terminated by agreement between the parties,the principal is not legally required to give any third party notice of the termination.

An agent generally is not liable for contracts made in connection with a fully-disclosed agency.

The most important factor in determining whether one who performs services for another is an independent contractor is the degree of control that the hiring party exercises over the party performing the work.

A party who employs another person to act on his or her behalf is called a(n):

Powers of attorney must be in writing.

Generally,which of the following is true about the liability of a principal for the tort of an agent,and the liability of an agent for the tort of a principal?

An agency can be formed by the conduct of the parties.

When a principal creates the appearance of an agency that does not actually exist,which kind of agency is established?

A principal owes a duty to ________ the agent for any losses the agent suffers because of the principal's conduct.

Sandy,an old car enthusiast,has been hired by Pat to find and buy a fully-restored 1955 Ford Thunderbird for Pat.Sandy finds such a car in pristine condition,and she would actually like to purchase the Thunderbird for herself.She tells Pat about the car,but Pat declines to purchase the car because it has an automatic transmission.Sandy then buys this car for herself.What has Sandy done in violation of her duty of loyalty?

Kathy owns an apartment building on the edge of a densely-populated city.It has become dilapidated.It would be more expensive to renovate the existing building than to tear it down and rebuild,so she hires the Big Boom Demolition Company to implode the building.Kathy,who knows nothing about demolitions,simply tells Big Boom that she wants the demolition completed by August 1.She will be on vacation in Japan at the time,and will return on August 8.Mike,who has twenty-one years of demolition experience and is the manager of Big Boom,secured the proper governmental permits,and set the explosive charges.On August 1,at the time allowed in the permit,the explosives are detonated.Although barriers were set up keeping the public away for a radius of one-half mile in all directions,the debris scattered over a three-quarter mile radius,harming several people.This was because Mike used more dynamite than was necessary.What are the relationships of the parties,and who is liable for the injuries?

The doctrine of respondeat superior makes a principal liable for any tortious or criminal acts committed by the agent,in furtherance of the agency,that result in harm to others.

In most states,a real estate broker's contract to sell real estate must be in writing.

In order for a principal to be liable for the agent's negligence,the situation must meet the requirements of both the "motivation" and the "work-related" tests.

A party who employs another person to act on his or her behalf is called an authority.