Exam 14: Agency and the Employment Relationship

When an employer-employee relationship exists, employers:

If a principal behaves as if he intended to ratify an unauthorized agreement between his agent and a third party, a court will find that implied ratification has occurred.

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC was liable as it had given Galgano apparent authority to make the lease.

Agents have a fiduciary duty to their principals.

Apparent authority arises when agent concludes that there is an appearance of authority from the principal to act on behalf of the principal in dealing with third parties.

The principal's duty to indemnify the agent means the principal must:

An agency ends without any action by the principal or the agent through:

For an agent to be a fiduciary means to:

When an agent pays for the right to have authority for a business, a(n) ____ is created.

A stocker in a grocery store is an employee but not an agent for the store.

Geary was fired by his supervisor for revealing to higher management a serious problem with a company product. He sued for wrongful dismissal. You would expect the court held that Geary's dismissal was proper under employment-at-will despite his good motives.

If money is commingled (funds of agent mixed with funds of the principal), a violation of duty to account occurs only if the principal can show actual harm.

You hire an agent to sell your house for you. Typically, such an agent receives a fee only if they actually sell the house. This person is most likely:

Many courts hold employee handbooks may create contractual obligations between employers and employees.

An express contract in employment exists when:

A person authorized to execute all regular transactions connected with a business is called a:

In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held that his employer, Wardley, was liable for his actions because it failed to monitor Gritton's improper actions sufficiently.

Which of the following is an advantage to having the ability to use agents:

Persons appointed by an agent delegated some authority are known as:

Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted in: