Exam 17: Agency Relationships in Business

A principal is not normally liable for the tort of an agent committed within the scope of the agency or employment.​

Fact Pattern 17-2 Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations. -Refer to Fact Pattern 17-2. Garage Door hires Janitorial Service Company to clean the store. Garage Door gives Janitorial Service instructions as to what needs to be cleaned and when. With respect to Garage Door, Janitorial Service is​

When the principal-agent relationship is contractual, the agent may have a right to specific performance.​

Donald approves on behalf of Evelyn-but without authorization-a contract with Farouk to build a new silo. Evelyn does not ratify the contract. The deal with Farouk is ​

​Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity, Rosario is

Becca is a purchasing agent for Cable & Wire Corporation. Doyle, a Cable & Wire corporate officer, gives Becca written authority to buy for the firm as much copper as necessary. The next day, Doyle calls Becca and tells her to buy only a certain quantity of copper and no more. Becca shows the written authority to Earthbound Resources, Inc., and enters into a contract to buy more than the quantity specified by Doyle. Earthbound Resources ships the order to Cable & Wire. Is Cable & Wire liable to Earthbound Resources under the contract? Is Becca liable? In each case, if so, why? If not, why not?​

Fact Pattern 17-1 Nadine and Orin work at Pumps & Pipes Inc. Nadine is a sales representative who works with Pumps's customers, including contractors, government agencies, farmers, and others, as well as individual consumers. Pumps closely supervises all of its sales reps, and dictates their schedules. Orin is an engineer who works in Pumps's design department. -​Refer to Fact Pattern 17-1. With respect to third parties, Nadine is Pumps's

A person does not need contractual capacity to be an agent.​

Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand​

A principal cannot be estopped from denying that an agent has authority.​

A special power of attorney permits an agent to transact all business for a principal.​

Fact Pattern 17-2 Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations. -​Refer to Fact Pattern 17-2. Garage Door authorizes Homer to sell garage door upgrades and accessories at the buyers' locations at prices that Homer negotiates with those buyers. With respect to sales at those locations, Homer is

An agency can terminate once its purpose is achieved.​

The agent has the right to be indemnified.​

A principal is not normally liable for the crime of an agent committed within the scope of the agency or employment.​

An agency by estoppel arises when the principal's actions have created the appearance of an agency that does not in fact exist.​

John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch. John makes a deal with Lawson, the owner of a local herd, and makes a down payment. Kelly fails to pay the rest of the price. Lawson sues John for breach of contract. John's right to hold Kelly liable for any damages that he has to pay is the right of​

Under the law of agency, notice to the agent is notice to the principal.​

Implied authority is authority declared in clear, direct, definite terms.​

High Plains Distribution Inc. hires Inez to work on its shipping dock, accepting deliveries, dispatching trucks, and dealing with customers and other companies' drivers. With respect to High Plains, Inez is most likely​