Exam 9: Agency Formation and Duties

An agent has a duty to keep and make available to the principal an account of all property and funds received and paid out on the principal's behalf.

Fact Pattern 9-2 Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations. -Refer to Fact Pattern 9-2.At the shop, Faye is​

Don is Equipment Repair Company's chief executive officer. On Equipment Repair's behalf, Don solicits business, hires and fires workers, and handles finances. With respect to Equipment Repair, Don is most likely​

An agent can represent two principals in the same transaction as long as neither of them knows about it.

Under the law of agency, notice to the agent is notice to the principal.

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

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf. In this relationship, Jewelry & Coin is​

The agent has the right to be reimbursed and indemnified.

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity, Rosario is​

Through agents, a principal can conduct more than one business operation at a time.

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

Dewey is a corporate officer of Energy Corporation. Dewey serves in a representative capacity for the corporation's owners. With respect to binding the corporation to contracts, Dewey is​

Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ron not to make any warranties for the cars. To make a sale to Sylvia, however, Ron adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince's right to hold Ron liable for any damages Quince has to pay Sylvia is the right of​

Anything that an agent obtains by virtue of the agency relationship is his or hers to keep.

Whether a worker is an employee or an independent contractor has no effect on the employer's liability for the worker's actions.

Independent contractors control the details of their work performance.

Rondi holds herself out as possessing special accounting skills. As an agent, she must exercise the degree of skill or care expected of​

An agency relationship cannot be created by an oral agreement.

A familiar example of an agent is the shareholder of a corporation.

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