Exam 10: Agency and Partnership

When Joe was given authority to do "anything necessarily incidental" to carrying out his agency function of selling vacuum cleaners for the principal, that gave Joe the authority to borrow money to purchase a car to be used in the business.

The sole proprietor carries on business alone and cannot employ others in the process.

A principal is not bound in contract with the third party with whom the agent dealt if the agent is

Utmost good faith is another term for a business's reputation and ongoing relations with customers.

Although the sole proprietor's entire personal fortune is at risk, insurance may offset that risk.

Despite its organizational simplicity, sole proprietorships must satisfy many federal, provincial, and municipal requirements to carry on business. List and describe three regulatory requirements.

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

Which one of the following situations will result in the existence of a partnership? Assume no corporation has been created.

Reese Publishing Inc. hosts a golf tournament. In attendance are Jennifer Reese, the owner, director, and manager of Reese Publishing Inc.; her husband, Aaryn, a professional race-car driver and voracious reader who reads everything Reese Publishing Inc. publishes; her sales force, Laura, Catherine, and Keighla (each of whom signed deals that day); and Gena, the office manager, who is responsible for all of the company's office supply purchases. Which of these people act as agents?

Discuss the extent of an agent's authority to bind a principal in dealings with a third party.

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

Discuss the concept of vicarious liability as it relates to employment and agency law.

If a person wants to invest in a partnership but avoid the obligations associated with partnership, what can she do?

Which of the following statements is correct with respect to the Partnership Act?

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

It is possible through a partnership agreement to create different classes of partners.

Which one of the following is correct with respect to the rights of partners unless they have agreed otherwise?

An agent need not disclose the fact that he is acting for a principal in dealings with a third party, and that contract may still be binding on that third party.

An agent contracted with a third party on behalf of a principal, but went beyond both his actual and apparent authority. The third party was never paid. Which of the following indicates the legal position of the third party?

Full disclosure refers to an obligation to reveal all details of a transaction.