Exam 16: Management of Employee Conduct: Agency

Ratification of a contract by a principal releases the agent from all liability to the third party.

Jan hires Duncan to act as her agent in acquiring some property for the development of a new subdivision she is planning that will be an elegant planned community.Jan instructs Duncan that he is not to say he is working for her or,for that matter,that he is working for anyone.If Duncan enters into a contract for land for Jan that is the parcel she wanted:

Discuss the basic requirements for a non-compete agreement.

Ellen Fishman was hired by Attics,Inc.,a company that does attic refurbishments and redesigns,to evaluate attics,provide homeowners with estimates,and,hopefully,sign them up with contracts for their attics.Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic.Because she was new at the job,Ellen forgot the demolition costs in the estimate.However,the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1100.Attics,Inc.'s president has refused to do the attic for anything less than $15,000,what the estimate should have been.The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment,which was $12,500.Attics,Inc.terminated Ellen.However,Ellen still had all the materials,books,contract forms,and her card from Attics,Inc.Ellen went out and got three homeowners to sign contracts for refurbishments for prices ranging from $15,000 to $22,000.If Attics,Inc.performed the contracts Ellen negotiated,it would:

A sales clerk at a department store is an example of an independent contractor.

Apparent authority ends when an agent is fired.

Elizabeth Drake worked as a nanny for Kimba and Zeus Baird and cared for their 3 children each day from 8 AM until 5:30 PM.At 10:00 AM each day,Elizabeth drove the Bairds' 3-year-old daughter to pre-school.On the way to the pre-school last Tuesday,Elizabeth failed to stop at a stop sign and struck a UPS truck.Could UPS make a claim against the Bairds?

The duty of loyalty of an agent to a principal does not cover conflicts of interest.

The IRS is conducting an investigation of the construction industry because contractors routinely classify carpenters,dry-wallers,and plumbers who work on all of their projects as independent contractors.These craftsmen report for work on different jobs,but all of the jobs are managed by the same contracting firm.Which of the following will be most important in determining whether the craftsmen are employees rather than independent contractors?

There is no apparent authority in an undisclosed principal relationship.

There is no employer liability for negligent hiring.

Which of the following is not an independent contractor relationship?

Rami Essaid worked for a large computer security firm.As part of his employment agreement,he had been told about and initialed on his contract a noncompete clause that prevented him from starting his own firm or working for a competitor in the area of computer security for six months following his termination of employment,for whatever reason.Rami quit his job and started his own firm that specializes in protecting websites from automated computer programs,the same type of work that he was doing for his former employer.His former employer has brought suit to stop Rami from operating his company for six months.Which of the following statements is correct?

A principal is not liable for an accident caused by its delivery person.

An agency contract must be evidenced by a record to be valid.

An employer is only liable for its actions when hiring,not its failure to do something.

Non-solicitation clauses:​

Which is a requirement for the creation of an agency relationship?

Which is $\underline{\text{not}}$ an example of an independent contractor relationship?

"Talk to Ann.She used to work here,but I think she is the best one to get this deal done for us," is an example of express authority given to an agent.