Exam 25: Agency Formation and Duties

An agency by estoppel arises when the principal's actions have created the appearance of an agency that does not in fact exist.

The agent has the right to be compensated,to be reimbursed and indemnified,and to have a safe working environment.

A principal has a duty to cooperate with the agent and to assist the agent in performing his or he duties.

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

Investment Holdings Corporation hires Jerilyn,a business appraiser,to locate investment possibilities for Investment Holdings.Jerilyn learns of a salsa and hot sauce manufacturing company available for a reasonable price,but neglects to tell Investment Holdings.Most likely,Jerilyn

An agency relationship created for a purpose that is contrary to public policy may still be enforceable.

Lucille is married to Marcus.Lucille buys food for their children's lunches and charges the cost to Marcus's account.This is

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

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

Even during emergency situations,when the principal cannot be consulted,the agent may not deviate from the principal's instructions without violating the duty of obedience.

Fact Pattern 25-1B (Questions B4-B6 apply) Margo works as an administrator and receptionist in Neon's Garage Door Store.Neon withholds federal taxes from Margo's pay,and controls the methods and details of the performance of her work.Margo is not au?thorized to modify the prices or other terms of a sale at the store.Omar installs Neon's Garage Door products at the buyers' locations. -Refer to Fact Pattern 25-1B.Neon authorizes Omar to sell garage door upgrades and accessories at the buyers' locations at prices that Omar negotiates with those buyers.With respect to sales at those locations,Omar is

Fact Pattern 25-1B (Questions B4-B6 apply) Margo works as an administrator and receptionist in Neon's Garage Door Store.Neon withholds federal taxes from Margo's pay,and controls the methods and details of the performance of her work.Margo is not au?thorized to modify the prices or other terms of a sale at the store.Omar installs Neon's Garage Door products at the buyers' locations. -Refer to Fact Pattern 25-1B.Neon hires Professional Janitorial Company to clean the store.Neon gives Professional Janitorial instructions as to what needs to be cleaned and when.Professional Janitorial is

If a great degree of skill is required,this may indicate that a person is an employee hired for a specialized job and not an independent contractor.

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

California Produce Company hires Drew to work on California Produce's shipping dock,checking outgoing loads and dispatching the company's drivers.With respect to California Produce,Drew is most likely

The term fiduciary is at the heart of agency law.

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 only one business operation at a time.

Largo is an agent for MaryElise.MaryElise gives Largo clear instructions to enter into contracts on her behalf only on Mondays,Wednesdays,or Fridays.Largo enters into a contract on her behalf on Tuesday.Largo has breached

Insurance Sales Corporation hires Jeremy to act as its agent.Insurance Sales's right not to perform a contract entered into by Jeremy,if he breaches their agency agreement,is the right of