Exam 17: Agency Relationships in Business

Reliable Insurance Company employs Stuart as an agent. To terminate Stuart's authority, Reliable Insurance must notify​

Business Travelers Hotel Corporation hires Conrad, a real estate agent, to locate hotel properties for the company. Conrad learns of a hotel available for $3.2 million, informs Business Travelers, and makes an offer of $2.9 million on Business Travelers's instruction. The offer is rejected. Conrad​

Private Security Service employs Olsen as an agent. Without Private Security's knowledge but otherwise acting within the scope of employment, Olsen commits a crime. The state can successfully prosecute​

An undisclosed principal is not liable to a third party for a contract made by an agent.​

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve's actions, it will be because their relationship is​

Largo is an agent for MaryElise. MaryElise gives Largo clear instructions to enter into contracts on her behalf only on Mondays, Wednesdays, or Fridays. Largo enters into a contract on her behalf on Tuesday. Largo has breached​

Kevin is an agent for Lookout Mountain Accountants, Inc. On Lookout Mountain's behalf and at its request, Kevin pays Nathan for software designed for the management of Lookout Mountain's services. Kevin's right to obtain the amount of those payments from Lookout Mountain arises under the principal's duty of​

Through agents, a principal can conduct more than one business operation at a time.​

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is​

Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies.​

Flo, an agent for Grover, enters into a contract on Grover's behalf with Hong that must be in writing to be enforceable under the Statute of Frauds. Failure to comply with the equal dignity rule, with respect to this contract, can make the contract voidable at the option of​

Norton grants an ordinary power of attorney to Olena to locate potential real estate investment opportunities on Norton's behalf. This power will terminate on Norton's​

Employment laws apply to the employer-independent contractor relationship.​

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. At the shop, Faye is​

Ben manages a warehouse and its inventory for Coffee Shops, Inc. To operate this part of the business, Ben's authority can be inferred​

Roman is the chief executive officer of Salty Snax Corporation. Roman's responsibilities include decisions on product development, marketing, and other significant business directions. Roman is subject to the approval and oversight of Salty Snax's board of directors. Teri is a Salty Snax manager whose duties include the firm's day-to-day hiring, firing, purchasing, and selling. Umberto is a Salty Snax salesperson, whose daily activities are controlled by Teri. Velma writes sales manuals and promotional materials for Salty Snax's products according to Roman's instructions and subject to Salty Snax's control, but has no dealings with the company's customers or suppliers. Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax's control. Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?​

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, Orin is Pumps's​

An agent's deviation from the lawful clearly stated instructions of the principal is a violation of the duty of obedience.​

An agent can represent two principals in the same transaction as long as neither of them knows about it.​

Anything that an agent obtains by virtue of the agency relationship is his or hers to keep.​