Question 1

Apparent authority arises from what the principal makes clear to the agent.

Accepted Answer

A) True 
 B)False  False

Question 2

If a principal is disclosed,the agent may be liable to a third party for the principal's nonperformance of a contract.

Accepted Answer

A) True 
 B)False  False

Question 3

Brenda is a purchasing agent for Commodities Exchange Corporation.Dennis,a Commodities corporate officer,gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary.The next day,Dennis calls Brenda and tells her to buy only fifty note?book computers and nothing else.Brenda shows the written authority to E-Products,Inc.,and enters into a contract with E-Products to buy sixty note?book computers and a selection of printers,scanners,and extra storage media.E-Products ships the order to Commodities.Is Commodities li?able to E-Products under the contract? Is Brenda liable? In each case,if so,why? If not,why not?

Accepted Answer

Commodities is liable to E-Products.Brenda is not liable to E-Products.A principal is liable for the contracts of its agents entered into with actual or apparent authority.Actual authority may be express or implied.Apparent authority arises from what the principal causes a third party reasonably to believe regarding the agent's authority to act,even if the agent does not have actual authority to act.If the third party changes its position in reliance on the principal's representations,the principal is estopped from denying that the agent had authority.In this problem,Brenda had the actual authority to order fifty notebook computers and apparent authority to order the rest of the equipment,according to the written authorization that Dennis gave to Brenda and Brenda showed to E-Products.E-Products's contract rights are not limited by the limits placed on that authority by Dennis's call to Brenda.Brenda is not liable to E-Products because she acted with apparent authority.Brenda is liable to Commodities,however,for exceeding her authority.

Question 4

A power of attorney can be special or general.

Accepted Answer

A) True 
 B)False

Question 5

A principal may be liable for the tort of an agent committed within the scope of the agency or employment.

Accepted Answer

A) True 
 B)False

Question 6

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Accepted Answer

A) apparent authority. 
B) express authority. 
C) implied authority. 
D) no authority. 
A) apparent authority. 
B) express authority. 
C) implied authority. 
D) no authority.

Question 7

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party.

Accepted Answer

A) True 
 B)False

Question 8

Omar hires Petra,a real estate broker,to act as his agent to sell his land for $150,000.Oil is discovered beneath the land,causing its market value to in?crease considerably.The agency agreement is likely

Accepted Answer

A) still in force if Omar gives Petra additional consideration. 
B) still in force if Petra does not tell prospective customers. 
C) terminated by mutual consent of the parties. 
D) terminated by operation of law. 
A) still in force if Omar gives Petra additional consideration. 
B) still in force if Petra does not tell prospective customers. 
C) terminated by mutual consent of the parties. 
D) terminated by operation of law.

Question 9

A principal who authorizes an agent to commit a tort is not liable to persons or property injured thereby.

Accepted Answer

A) True 
 B)False

Question 10

Trey,an agent for Uno Music Corporation,executes an unau?thor?ized contract with Variety Recording,Inc.,that is highly ad?vanta?geous to Uno.Variety withdraws from the deal before Uno ratifies the con?tract.The contract is

Accepted Answer

A) valid. 
B) variable. 
C) void. 
D) voidable. 
A) valid. 
B) variable. 
C) void. 
D) voidable.

Question 11

An agency coupled with an interest is an agency created for the agent's benefit.

Accepted Answer

A) True 
 B)False

Question 12

An agent's authority must be express for the agent's act to bind a principal.

Accepted Answer

A) True 
 B)False

Question 13

Apparent authority is authority declared in clear,direct,definite terms.

Accepted Answer

A) True 
 B)False

Question 14

A power of attorney confers express authority.

Accepted Answer

A) True 
 B)False

Question 15

Before a principal can ratify a contract,the third party must withdraw from the deal.

Accepted Answer

A) True 
 B)False

Question 16

Elin,an agent for First Credit Corporation (FC),enters into an unau?thorized contract with Great Expectations,Inc.(GE),purportedly on FC's behalf.This contract will be enforceable if it is ratified by

Accepted Answer

A) any third party. 
B) Elin. 
C) FC. 
D) GE. 
A) any third party. 
B) Elin. 
C) FC. 
D) GE.

Question 17

Fact Pattern 33-1A (Questions A10-A11 apply)
Ulani indicates that she is acting as an agent on behalf of an unidentified client-Thoroughbred Stallions,LLC-when she enters into a contract with Shana.
-Refer to Fact Pattern 33-1A.Liability to Shana for nonper?formance of the con?tract may be imposed on

Accepted Answer

A) neither Ulani nor Thoroughbred Stallions. 
B) Ulani and Thoroughbred Stallions. 
C) Ulani only. 
D) Thoroughbred Stallions only. 
A) neither Ulani nor Thoroughbred Stallions. 
B) Ulani and Thoroughbred Stallions. 
C) Ulani only. 
D) Thoroughbred Stallions only.

Question 18

Security Armored Car Corporation employs Theo as an agent.Without Security's knowledge but otherwise acting within the scope of em?ployment,Theo commits a crime.The state can successfully prosecute

Accepted Answer

A) neither Security nor Theo. 
B) Security only. 
C) Security or Theo. 
D) Theo only. 
A) neither Security nor Theo. 
B) Security only. 
C) Security or Theo. 
D) Theo only.

Question 19

If a principal is undisclosed,the agent may be liable to the principal for a third party's nonperformance of a contract.

Accepted Answer

A) True 
 B)False

Question 20

Tropical Vittles,LLC,hires Sophie to act as its agent to buy a ten-acre tract of land from Rico for $1,000 per acre.Tropical Vittles does not want Rico to know that it is the principal or that Sophie is its agent.Tropical Vittles wants the land for a new fast-food restaurant,and believes that Rico may not sell the land for that purpose or may demand a premium price.Sophie makes the purchase,signing only her name to the contract as the buyer and not disclosing to Rico the agency relationship.The transfer of the deed is to occur on May 1.Rico learns of Tropical Vittles's identity on April 15.Can Rico legally refuse to deed the property on May 1? Explain.

Accepted Answer

Generally,no.Although the identity of th

Exam 33: Agency Liability and Termination

Apparent authority arises from what the principal makes clear to the agent.

If a principal is disclosed,the agent may be liable to a third party for the principal's nonperformance of a contract.

A power of attorney can be special or general.

A principal may be liable for the tort of an agent committed within the scope of the agency or employment.

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party.

Omar hires Petra,a real estate broker,to act as his agent to sell his land for $150,000.Oil is discovered beneath the land,causing its market value to in?crease considerably.The agency agreement is likely

A principal who authorizes an agent to commit a tort is not liable to persons or property injured thereby.

Trey,an agent for Uno Music Corporation,executes an unau?thor?ized contract with Variety Recording,Inc.,that is highly ad?vanta?geous to Uno.Variety withdraws from the deal before Uno ratifies the con?tract.The contract is

An agency coupled with an interest is an agency created for the agent's benefit.

An agent's authority must be express for the agent's act to bind a principal.

Apparent authority is authority declared in clear,direct,definite terms.

A power of attorney confers express authority.

Before a principal can ratify a contract,the third party must withdraw from the deal.

Elin,an agent for First Credit Corporation (FC),enters into an unau?thorized contract with Great Expectations,Inc.(GE),purportedly on FC's behalf.This contract will be enforceable if it is ratified by

Security Armored Car Corporation employs Theo as an agent.Without Security's knowledge but otherwise acting within the scope of em?ployment,Theo commits a crime.The state can successfully prosecute

If a principal is undisclosed,the agent may be liable to the principal for a third party's nonperformance of a contract.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

Ethics and Business Decision Making

Intentional Torts and Privacy

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, fraud, and Voluntary Consent

The Statute of Frauds

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

International Law in a Global Economy

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability,defenses,and Discharge

Checks and Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Mortgages Foreclosures After the Recession

Agency Formation and Duties

Employment,immigration,and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporate Formation and Financing

Corporate Directors,officers, Shareholders

Corporate Merger, consolidation, Termination

Securities Law Corporate Governance

Law for Small Business

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Professional Liaility and Accountability

Personal Property and Bailments

Real Property Landlord-Tenant Relationships

Insurance

Wills and Trusts

Legal and Ethical Considerations in Sustainability, Discovery, and Corporate Behavior

Legal and Ethical Issues in Contemporary Society

Contracts and Agreements

Legal Issues in Iowa's Video Game Labeling Statute, National Export Initiative, and Contract Law

Banking and Loan Liability

Bankruptcy and Agricultural Credit: Debts, Reporting, and Risk

Legal and Ethical Issues in Employment and Agency Relationships

Legal Issues in Business Franchising, LLC Management, Tax Collection, Director Liability, and Securities Regulations

Compliance and Ethics Issues in Business Operations

Risk Assessment, Virtual Property, Property Rights, and Building Moratoriums

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