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Exam 19: Agency Relationships

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Question 1

True/False

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In some situations, the courts find an agency relationship where there is no formal agreement.

A) True
B) False

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Question 2

Multiple Choice

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Ota works at Pumps Inc. She works in the company's engineering department, interacting with third parties only to discuss technical issues. With respect to third parties, Ota is

A) an independent contractor.
B) an employee only.
C) an employee and agent.
D) a principal.

E) A) and D)
F) B) and C)

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Question 3

Multiple Choice

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Diamonds & Gold Inc. hires Esmé to buy gems and precious metals from various sources on its behalf. In this relationship, Diamonds is

Aiden hires Buck to manage Aiden's Cattle Ranch. Buck agrees to act on Aiden's behalf, subject to Aiden's control, and Aiden trusts Buck to so act. Their relationship is

Agency relationships cannot exist outside an employment, so agency law has a narrower reach than employment law.

Suva is an agent for Tax Accountants, Inc. On the firm's behalf and at its request, Suva pays Uzo for specially coded software. Suva's right to obtain the amount of the payment from Tax Accountants arises under the duty of

Byron, a salesperson at a Carpet & Tile store, tells Dan, a customer, "Buy your flooring here, and I'll install it for less than the store would charge." Dan buys carpeting, which Byron installs for half the store's price. Byron keeps the money. With respect to the store, Byron has breached

A truck driver who drives a company truck on a regular basis is most likely an employee.

Ben manages a warehouse and its inventory for Coffee Roaster Inc. To operate this part of the business, Ben's authority can be inferred

Any person can be an agent, regardless of whether he or she has the capacity to contract.

Ira serves in a representative capacity for Jett. Key is injured through Ira's negligence. Jett may be liable to Key if Ira's conduct occurred

Erin indicates that she is acting as an agent on behalf of an unidentified client-Flight Services Inc.-when she enters into a contract with Go Airlines. Liability to Go for nonperformance of the contract may be imposed on

Once the agency relationship between a principal and an agent has ended, the agent loses the right to bind the principal.

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

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 the hosts of banquets and other events. In this capacity, Rosario is

Farah hires Gil, a real estate broker, to act as her agent to sell her land for $150,000. Before the land is sold at the stated price, oil is discovered beneath it, causing its market value to increase considerably. The agreement between Farah and Gil is likely

Vera is a purchasing agent for Wild-Caught Fish Inc., with the authority to buy a sea fisher's catch up to a certain quantity. After the fish is bought, the agency relationship terminates

In an agency relationship, one party called the principal agrees to represent or act for another called the agent.

A principal may be liable for an agent's or an employee's tort, with the exception of negligence, which is an unintentional tort for which the agent or employee is vicariously liable.

A property owner who hires a realtor to sell the property thereby enters into an agency relationship with an employee for a limited time.