Exam 17: Agency Relationships in Business

Spicy Hot Dog Vendors, Inc., grants its agent Teona an exclusive territory in which to sell Spicy products. Spicy's attempt to compete with Teona in that territory would most likely violate​

The relationship between an employer and an employee cannot involve an agency relationship.​

Lena is a salesperson for Musical Instruments, Inc. She tells Nayda, a customer, that an instrument has a certain quality when, as Lena knows, it does not. In reliance, Nayda buys the instrument. Liable for this misrepresentation is​

A principal is not bound to an unauthorized contract unless the principal ratifies it.​

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort. The agency will terminate​

Orin hires Pat, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Pat is Orin's agent​

An agent's duties to the principal are implied from the agency relationship only if the identity of the principal is disclosed to a third party.​

Employers cannot avoid any tax liabilities by hiring independent contractors instead of employees.​

A partially disclosed principal is only partially liable to a third party for a contract made by an agent.​

An agency relationship is enforceable even if it is created for a purpose that is contrary to public policy.​

If an agent has no authority but nevertheless contracts with a third party, the principal cannot normally be held liable on the contract.​

Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on​