Exam 11: Agency and Partnership

Joe was a chauffeur,working for Sam.When Joe was taking the car in to have it serviced,he saw a brand new BMW and bought it on behalf of Sam.When he took it home,Sam was upset,explained that he didn't want a new BMW,and told him to take it back.Joe persuaded him to take it for a test drive first.Explain the legal position of the parties.

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

Which of the following is correct with respect to the agency relationship?

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

Dennis,Sam,George,and Ray were partners in an accounting business,and Ray decided he wanted to retire.He sold his share of the partnership to Leonardo,but Leonardo is not a partner unless the other partners approve the change.

Adams was approached by Mr.McCarthy of XYZ Co.,who requested that Adams pay $10 000 to extinguish a debt owed by the partnership of Adams and Jefferson.Adams denied the partnership and the liability.In asserting his claim,McCarthy cited the following facts,all of which he could prove.Which of these facts is the strongest evidence of the existence of a partnership?

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

Which of the following is an example of an agent's breach of fiduciary duty to his principal?

Explain the liability of a partner for another partner's actions.

A partnership can always be brought to an end by the service of notice on the other partners,no matter what the partnership agreement says.

Which of the following is an example of an agent as opposed to an employee?

Joe Smith owns a bookstore as the sole proprietor.He is also a partner in a hotel,which borrowed $100 000 from the bank.Which of the following statements is true?

Ravinder is the sole proprietor of a shoe store.He is also a partner in a restaurant,which has recently been sued for negligence after countless people got sick from the salmon Alfredo dinner special.Which of the following statements is true?

What restrictions are there on a principal's right to ratify?

When a principal is undisclosed,the third party is restricted to suing the agent.

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

In which one of the following situations is the principal not responsible for the conduct of the agent?

Dave and his sister,Chris,made unusual kites.They both created the designs; Dave made the patterns.Friends had always wanted to buy their kites.After Chris completed a college marketing program,she began to talk to Dave about going into business selling kites.Ed,a friend of Chris's,wanted to be involved.He said he could buy the supplies and do the other odd chores.They decided to try to make a go of it and to share the profits as follows: Dave 35 percent,Chris 35 percent,and Ed 30 percent.Things went well for seven months.They even hired George to deliver kites to the increased number of stores buying them.Unfortunately for business,Chris and Ed became romantically involved.This was followed by a heated dispute.Ed disappeared with $1300 collected from customers and $600 worth of supplies,which he had bought on behalf of the business from their regular supplier.At about the same time,George negligently broke a customer's $200 lamp when he was delivering a kite.Given these facts,which of the following is true?

"An agent is free to withhold information from the principal as long as it doesn't hurt the principal." Discuss the accuracy of this statement.

If a third party relies on the principal's representation that the agent has the authority to act,which of the following is true?