Exam 25: Agency

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Barnett was orally hired by Paula to locate desirable real estate that she could use for rental property.She stated she wanted to find a four-plex that could be purchased for under $200,000 that could be rented for at least $1,000 per month per unit (which equates to $4,000 rental per month for the property).Barnett located a four-plex that could be purchased for $160,000 and was renting for $1,200 per unit.It was such a good deal that he purchased it for himself.About two months later he found a second property that was listed for $199,000 and rented for $1,000 per unit.Paula purchased the property.Afterwards,she learned that Barnett had bought the $160,000 four-plex for himself without telling her about it.Paula believes that Barnett has acted improperly.Barnett claims that he did what she asked -- he found a property for under $200,000 that rented for $1,000 per unit.He also claims that since their agreement was oral,he has a legal defense if she pursues the matter in court.Does Paula have any legal recourse against Barnett? Explain.

Jim agreed to show Donna's car to a potential buyer.Donna was not able to be home since she had to attend a meeting.After showing the car,Jim left the keys in it and the car was stolen.Which statement is correct?

You cannot be held liable for the actions of your agents if the agents are violating your instructions.

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15- year-old,to operate an industrial machine.Hiring the 15-year-old violates the child labor laws.Tom:

An agent must obey all instructions of the principal.

Nikki was an tax accountant with HBR Accounting.Nikki decided to do some private tax consulting in the evenings and on weekends.HBR is unaware of Nikki's consulting work.Which statement is correct?

Circus Pizza contracted with Art to run its birthday parties.Art's responsibilities included supervising the children and organizing the games.Circus did not investigate Art's background,which included a history of assaulting children.Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party.Circus Pizza:

Which of the following is not required of an agency relationship?

Mohammad was an employee in the new product development department of Estay Inc.Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months.Estay took great care to keep information concerning the new product a secret.Ceries,Inc. ,a competitor of Estay,persuaded Mohammad to leave Estay to direct Ceries' marketing department.Which statement is correct?

Mrs.O'Leary hired Jenna to sell her house in Michigan.She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate,acting as a prudent person." On May 30,Jenna finalized a deal with Brandon for the purchase of the house.Brandon and Jenna signed the real estate contract that day.Jenna learned the next day that Mrs.O'Leary had died May 29.

Rob agrees to act as an agent for Diane in selling her car.Diane has a duty of loyalty to Rob.

Janet was employed as a sales representative for Esday,Inc.An appreciative customer gave her a diamond bracelet for all her hard work on a complicated contract.Can Janet keep the bracelet?

The bankruptcy of an agent automatically terminates an agency relationship.

HBR Accounting hired Denise,a CPA,to prepare tax returns.Which statement is correct?

Cameron,editor of the local newspaper,assigned to Jim the writing of a story about pollution of a nearby stream.Although Jim used reasonable care in gathering and checking his information,unknown to Jim,the story contained a defamatory statement about Maureen.Maureen reads the story and sues Jim for libel.Cameron,who read and published the story:

Express authority can be created by:

An agency will be terminated in all but which one of the following situations?

Jolene hired Lacy to find a buyer for her house.Adam was interested in buying the house.If both Jolene and Adam agree,Lacy,a real estate agent,may represent both parties.

An agent is always liable for his or her own torts committed within the scope of the agency relationship.