Exam 29: Agency Formation and Termination

A principal who lacks contractual capacity can appoint an agent.

Mary has been hired to write courses for a Web-based training organization.Mary works at the offices of the organization.Mary is given content guidelines and a contract for each course that she writes,and is paid a flat fee upon completion of the course.It can take anywhere from 2 weeks to 6 weeks to complete a course.The organization wants the contractors to work in their offices during the regular 40-hour work week,unless they need to be elsewhere to do research.The organization provides a computer to Mary.Mary also is able to use other employees at the organization for word processing and editing.Is Mary an employee or an independent contractor?

Ringo is a welder at a manufacturing facility.His main function at the organization is to perform welding related tasks.His job does not entail purchasing,and he rarely interacts with anyone outside of the organization.While at the grocery store,he runs into George,a salesman from a welding supply company.George tells Ringo that he will sell the company welding supplies at a significant discount if he can sign an exclusive contract immediately.Ringo thinks it looks like a good deal,so he signs his company up for the terrific bargain. Ringo tells his boss,Paul,about the deal.Paul is initially upset,but after review of the contract he decides to accept shipment of the supplies for the next few months.After a few months have passed,John,a salesman from a competing welding supply company offers an even better deal to Paul.Paul wants to get out of the contract with George.He's thinking of telling George that the initial contract wasn't valid because Ringo did not have authority to sign on behalf of the company.What is the most likely result?

An attorney is an agent when he represents a client.

An agent negotiates a contract with a third party,for which the agent did not have express authority.Which of the following is true?

Jan wants to buy a house,but her friend Ann is a much tougher negotiator.They devise a plan where Ann will tell the seller of the house that she is Jan's agent and will make all the decisions with respect to any purchase of the house.They also agree that Ann actually will have no such authority and that Jan is the only one who will make any decisions relative to purchasing the house.They meet with the seller,and Ann says that she is Jan's agent while Jan says nothing.Has an agency been created?

A principal-agent relationship exists when an employer hires an employee to perform some form of physical service.

An agency coupled with an interest typically arises in which situation?

Agnes is an agent for Pepe for maintaining Pepe's antique car collection,including the sale and purchase of antique cars.Agnes has had this position for several years,but recently Agnes has developed a cocaine habit.She recently sold one of Pepe's cars and kept some of the money herself to buy some cocaine.Soon thereafter,Agnes was declared bankrupt.The state then notified Agnes that she had sold the maximum allowable number of cars in a year without getting a dealer's license.Shortly thereafter,Pepe was on a secluded island and died,which no one knew about until 2 weeks later.Discuss the effect of these events on the existence of the agency.

Apparent authority can be best described as a situation where:

An express agency requires:

An agency may be terminated if the principal is declared bankrupt.

Bob enlists the help of his son to buy a new car.On the way to test-drive several models,Bob tells his son,"I'm leaving this entire decision up to you except that you are not to spend over $20,000 on whatever car you decide on." At the Toyota dealer,Bob tells the salesperson,"I'm turning this whole decision over to my son,so deal with him even though it will be my car." Later,the son returns to the dealership and negotiates the purchase of a Toyota Camry for $21,500.What type of authority,if any,existed for the son to purchase this car?

The termination of an agency by the agent is called the revocation of authority.

An express agency arrangement can be formed with which types of agreements?

An agency agreement may terminate after a certain event happens.

What is the effect of an agent terminating a fixed-term agency prior to the expiration of the stated period of time?

In the context of agency,ratification refers to:

Assuming that any minor who is involved is old enough to understand the terms of a agency relationship,which of the following is generally true?

Which of the following would not terminate an agency by operation of law?