Exam 33: Agency Liability and Termination

Giving an agent a power of attorney confers express authority.

Lima, an agent for Mindwonder Games LLC, executes an unauthorized contract with NOW Marketing Inc. The deal is highly advantageous to Mindwonder, and the company ratifies the contract. The contract is​

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​

Mirena serves in a representative capacity for Netanya. Orla is injured through Mirena's negligence. Netanya may be liable to Orla if Mirena's conduct occurred​

Ratification occurs when a principal affirms, or accepts responsibility for, an agent's unauthorized act.

Seed Packets, Inc., a garden seed company, requires its customers to pay by check. Taylor, a Seed Packets driver, tells customers that they can pay her with cash. When Seed Packets learns of Taylor's collections, it does not act to stop them. Taylor steals some of the cash. Under the doctrine of apparent authority, Seed Packets will most likely​

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​

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

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be​

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

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

An agent's implied authority cannot be implied by custom.

A disclosed principal is a principal whose identity is known by a third party with whom an agent contracts on the principal's behalf.

An employer is charged with the knowledge of any dangerous condition discovered by an employee and pertinent to the employment situation.

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​

For an agent's implied authority to be effective, a principal must confirm it in writing.

If a principal is undisclosed, the agent may be liable to the principal for a third party's nonperformance of a contract.

Even if a principal ratifies a contract without knowing all of the facts, the principal cannot later rescind the contract.

An agency can terminate once its purpose is achieved.

Under the doctrine of respondeat superior, an agent is liable for any harm caused to a principal by a third party.