Exam 29: Agency Formation and Termination

An agency by ratification occurs when a principal ratifies an authorized act.

A direct notice of termination goes to any third party who has knowledge of an agency but with whom the agent has not dealt.

Which of the following is true about a durable power of attorney?

Which of the following is true of an express agency?

An employer-employee relationship exists when an employer gives an employee authority to act and enter into contracts on his or her behalf.

Agency relationships created against public policy are void and unenforceable.

Matthew employs a real estate agent to sell his house for $10 million. The agent later learns that the house is rumored to be haunted and that brings down the value of the house to about $5 million. The agency terminates because of ________.

If an agency terminates by operation of law, there is no duty to notify third parties about the termination.

The termination of an agency contract in violation of the terms of the agency contract is referred to as ________.

If a person employs an architect to design the layout of his or her own home, it would constitute a(n) ________ relationship.

Only a lawyer can become an attorney-in-fact.

A(n) ________ is a contract a principal and agent enter into that says the principal cannot employ another agent other than the one stated.

Powers of attorney can be oral.

A duty that a principal owes to pay an agreed-upon amount to the agent, either upon the completion of the agency or at some other mutually agreeable time, is known as a principal's ________.

What is an implied agency?

Greg, who wants to sell a car he owns, authorizes his concierge, Walter, to find a potential buyer and finalize a deal above a stipulated price. Walter contracts Jacob, an independent car sales broker, and instructs him to only find a potential buyer and send them over to Walter for the sale. Greg then contracts CarWreckers, an automobile modification company to renovate his car. CarWreckers completes its work and Greg pays them. Jacob then searches for a suitable buyer and finds one in Carl. Carl buys the car and Jacob is paid for his services. Who is the principal during the car sale transaction?

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon will not hire another broker to sell that piece of land until the contract period expires. Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services. What kind of contract existed between Marlon and Nita?

The bankruptcy of a principal is not a valid reason to terminate an agency.

A durable power of attorney remains effective even if the principal is incapacitated.

The ________ is principal's duty to cover the agent for any losses the agent suffers because of the principal's conduct.