Exam 30: Relationship With Third Parties

To ratify a contract, the principal must have knowledge of all material facts and may ratify either the entire contract or the part that is advantageous to the principal.

MATCHING Part VI Matching Match each statement with the correct term below.a.The duty that requires an agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions.b.The requirement that an agent maintain and provide the principal with a true and complete account of money or other property that the agent receives or expends on behalf of the principal.c.A consensual relationship authorizing one party to act for and on behalf of another party.d.A person authorized to act on another's behalf.e.The requirement that an agent act with reasonable care and skill in performing the work for which she is employed.f.Written, formal appointment of an agent.g.The requirement that an agent use reasonable efforts to give the principal information that is relevant to the affairs entrusted to her.h.Person who agrees to do a particular job for another but who is not subject to the other's control.i.A form of liability without fault in which the principal is held vicariously liable for the agent's unauthorized tort.j.Authority that is either express or implied and that depends upon consent manifested by the principal to the agent.k.A principal of whom a third party has no knowledge, because he has no reason to believe the agent is acting for a principal.l.Corporation's act of confirming a contract that was made by a promoter before the corporation was formed.m.Power that is based upon acts or conduct of the principal which manifests to a third party that the agent has power and upon which the third party justifiably relies.n.A principal that a third party knows exists but does not know who it is.o.The confirmation or affirmance by one person of a prior unauthorized act performed by another who is, or purports to be, his agent.p.Power inferred from words or conduct that a principal manifests to an agent. -ratification

MATCHING Part VI Matching Match each statement with the correct term below.a.The duty that requires an agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions.b.The requirement that an agent maintain and provide the principal with a true and complete account of money or other property that the agent receives or expends on behalf of the principal.c.A consensual relationship authorizing one party to act for and on behalf of another party.d.A person authorized to act on another's behalf.e.The requirement that an agent act with reasonable care and skill in performing the work for which she is employed.f.Written, formal appointment of an agent.g.The requirement that an agent use reasonable efforts to give the principal information that is relevant to the affairs entrusted to her.h.Person who agrees to do a particular job for another but who is not subject to the other's control.i.A form of liability without fault in which the principal is held vicariously liable for the agent's unauthorized tort.j.Authority that is either express or implied and that depends upon consent manifested by the principal to the agent.k.A principal of whom a third party has no knowledge, because he has no reason to believe the agent is acting for a principal.l.Corporation's act of confirming a contract that was made by a promoter before the corporation was formed.m.Power that is based upon acts or conduct of the principal which manifests to a third party that the agent has power and upon which the third party justifiably relies.n.A principal that a third party knows exists but does not know who it is.o.The confirmation or affirmance by one person of a prior unauthorized act performed by another who is, or purports to be, his agent.p.Power inferred from words or conduct that a principal manifests to an agent. -implied authority

Rena employs James, a real estate broker, to find a buyer for her home for a price of at least $125,000.James has the actual implied authority to contract for the sale of Rena's home.

Under the Second Restatement, the bankruptcy of the principal terminates, without notice, the power of an agent to affect the principal's property that passes to the bankruptcy trustee.

Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent.In reality, Ann has no authority.Betty hears the statement, but she says nothing.In reliance, Thomas ships goods to Betty on Ann's order.Betty is liable even though no actual authority existed.

A principal may be liable where his agent sells liquor to an underage person even though the principal did not authorize the act.

Actual express authority depends on the third party having knowledge of the manifestations or statements made by the principal to the agent.

Dan, an agent for Ramona, sees what he thinks is a good deal for Ramona.Without asking whether he has authority to negotiate the deal, Dan enters into a contract on Ramona's behalf.Ramona says later that she isn't interested.Is Ramona liable on the contract? Is Dan liable on the contract? Explain.

Edward is hired to manage Fred's business.Which of the following is untrue regarding Edward's authority?

MATCHING Part VI Matching Match each statement with the correct term below.a.The duty that requires an agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions.b.The requirement that an agent maintain and provide the principal with a true and complete account of money or other property that the agent receives or expends on behalf of the principal.c.A consensual relationship authorizing one party to act for and on behalf of another party.d.A person authorized to act on another's behalf.e.The requirement that an agent act with reasonable care and skill in performing the work for which she is employed.f.Written, formal appointment of an agent.g.The requirement that an agent use reasonable efforts to give the principal information that is relevant to the affairs entrusted to her.h.Person who agrees to do a particular job for another but who is not subject to the other's control.i.A form of liability without fault in which the principal is held vicariously liable for the agent's unauthorized tort.j.Authority that is either express or implied and that depends upon consent manifested by the principal to the agent.k.A principal of whom a third party has no knowledge, because he has no reason to believe the agent is acting for a principal.l.Corporation's act of confirming a contract that was made by a promoter before the corporation was formed.m.Power that is based upon acts or conduct of the principal which manifests to a third party that the agent has power and upon which the third party justifiably relies.n.A principal that a third party knows exists but does not know who it is.o.The confirmation or affirmance by one person of a prior unauthorized act performed by another who is, or purports to be, his agent.p.Power inferred from words or conduct that a principal manifests to an agent. -agency

Actual notice requires a written, not oral, communication to the third party.

An employer may have criminal liability for the acts of his employee.

Apparent authority arises out of words or conduct of a disclosed or unidentified principal manifested to third persons.

Ratification:

To effect a ratification, the principal must manifest an intent to do so.

Actual authority consists of both express and implied authority.

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Timothy, a prospective purchaser.The next day, Richard sends a letter to Sarah revoking her authority, but he fails to notify Timothy.Sarah:

Apparent authority is not actual authority.

Sunset Properties, Inc.hires William to manage its 82-unit apartment complex.Nothing is said as to expenses.William purchases fuel to heat the apartments and arranges for a repairperson to do ordinary maintenance.William will be personally liable for these expenses, because he has no authority to incur them.