Exam 25: Agency Law

One characteristic of independent contractors is that they cannot enter into contracts on behalf of the principal.

Most jurisdictions hold both the principal and the agent liable if the agent injures someone while on a "dual-purpose mission."

The legal rule of imputed knowledge means that the principal is assumed to know what the agent knows.

Susan hired an agent,Ricardo,to buy food for her restaurant.Susan told the manager of her supplier,Good Food,that Ricardo could buy supplies on her account.Unfortunately,Susan caught Ricardo stealing cash from the register,and fired him immediately.Susan took no steps to notify Good Food that Ricardo no longer had the authority to purchase food on her account.After he was fired,Ricardo went to Good Food and purchased $1,000 of food in Susan's name.Ricardo sold the food to his friends in order to acquire money to leave town.Is Susan liable to Good Food?

Which of the following does not automatically terminate an agency?

The agent's actions,not the principal's,create an apparent agency.

A principal is always liable for the torts of an independent contractor.

An employee is not an agent unless he or she is specifically empowered to enter into contracts on the principal employer's behalf.

A principal can ratify an agent's act before the agent's act occurs.

An employee might or might not also be an agent of the employer.

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

Adam was a factory sales agent for the Wave Warrior,a line of personal watercraft.His territory was the Atlantic coast of Florida,and he sold to retail dealers.One Friday morning Adam made one sales call,but at 10:00 a.m.,he headed to Tampa for the weekend.His boss was unaware of his early departure.Adam took the most powerful Wave Warrior with him.Even though he was outside his territory,he put the craft in the water and gave numerous sales demonstrations on Friday afternoon near Tampa.He made two sales,and arranged for delivery to be made through a Miami dealer,one of his favorites in his territory.Adam was not supposed to make sales in this manner,but he realized it was unlikely that his employer would find out.After his second sale,he took the buyer on a ride to show some of the craft's capabilities,and struck a swimmer near the beach,injuring the swimmer.Discuss the liability of Adam and his employer for the injuries.

An express agency requires:

Bob sells real estate in Knoxville,Tennessee for a real estate sales company.One afternoon,he shows a client two homes in Knoxville,and the client tells Bob that there is a great cabin for sale in Gatlinburg,about 40 miles from Knoxville.Bob drops the client off in Knoxville and travels to Gatlinburg to check out this property,because he would like to purchase a place for his family to "get away" on weekends.As he is entering Gatlinburg,he accidentally hits and injures a pedestrian.In determining whether Bob's employer can be held liable,a court will:

An agency results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control,and consent by the other so to act.

If the principal labels someone an "independent contractor," then that conclusively determines whether independent contractor status exists.

Express agency contracts can be either oral or written unless the Statute of Frauds stipulates that they must be written.

In a power of attorney relationship,the agent is called the:

Synergistic agency occurs when an agent acts for two or more different principals in the same transaction.

John is hired at minimum wage in a fast-food restaurant.John works at the counter taking customer orders,accepting payment,and giving the orders to the customers.John must work in accordance with a detailed procedures manual.John is: