Exam 14: Agency and the Employment Relationship

Which of the following determines the scope of authority given to an agent:

Bill is an attorney in Ohio. Marla hires Bill to create a trust for her children. Bill has not been keeping up with developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much more beneficial trust. In this case, Bill:

A(n) ____is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the principal.

The rule of law imposing vicarious liability on an innocent principal for the torts of an agent is respondeat superior.

Which of the four general factors which bear upon whether a master-servant relationship exists is determinative:

Because of the duty to inform, an agent must:

An agent must be able to show where money or property comes from and goes to because of his duty:

If someone volunteers to act as a gratuitous agent, and performs a task, such as selling a car, for a principal, the legal consequences are the same as if the agent were paid.

An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as $80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are:

Employers may wish to state that employee handbooks are not binding contracts.

One factor that courts may consider when trying to decide if an independent contract or employee relationship exists is whether or not the contractor has the right to direct or control the work of the employer.

When liability is imposed on an employer for a tort committed by an employee, the liability is based on the rule of law known as:

Employment-at-will means that, unless a contract holds otherwise, employers are free to fire workers at any time for any reason and employees are free to quit their jobs at any time for any reason.

A check-out clerk at the grocery store is typically in a master-servant relationship, not an agency relationship.

In Guz v. Bechtel National, Guz was fired by Bechtel after 22 years of service. The company eliminated his position despite his good performance and no financial problems in the company. The California high court held that Guz could:

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 breach of fiduciary duty.

Attorneys, auctioneers, and other such persons who conduct business on behalf of the principal are examples of:

A contract made by an agent on behalf of an undisclosed principal is never binding on a third party who did not know about the principal.

Agreement of the parties, ratification of the agent's activities by the principal, application of the doctrine of estoppel and operation of law are all:

In Guz v. Bechtel National, where Guz sued for breach of an implied contract to be terminated only for good cause and for breach of the implied covenant of good faith and fair dealing after he was fired by Bechtel National during a time of high profits, the supreme court held that Bechtel could: