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Exam 23: Agency Relationships in Business

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Question 21

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An agent has a duty to keep and make available to the principal an account of all property and funds received and paid out on the principal's behalf.

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Question 22

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Fact Pattern 23-2​ Berry indicates that she is acting as an agent on behalf of an unidentified client-Cuisine Catering, LLC-when she enters into a contract with Désean. -Refer to Fact Pattern 23-2. Liability to Désean for nonperformance of the contract may be imposed on​

A) ​none of the choices.
B) ​Berry and Cuisine Catering.
C) ​Berry only.
D) ​Cuisine Catering only.

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Question 23

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A person must have contractual capacity to be an agent.

Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is​

If a principal does not ratify an unauthorized contract, the principal is not bound.

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

Kelvin is an agent for Lookout Mountain Accountants, Inc. On Lookout's behalf and at its request, Kelvin pays Nerdlinger for custom software designed for the management of Lookout's services. Kelvin's right to obtain the amount of those payments from Lookout arises under the principal's duty of​

An agent's deviation from the lawful, clearly stated instructions of the principal is a violation of the duty of obedience.

Mountain States Distribution Inc. hires Norris to work on Mountain States's shipping dock, accepting deliveries, dispatching trucks, and dealing with customers and other companies' drivers. With respect to Mountain States, Norris is most likely​

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

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on​

Emery is a corporate officer of Frakking Mining Corporation. Emery serves in a representative capacity for Frakking's owners. With respect to binding Frakking Mining to contracts, Emery is​

Jim agrees to act on Joyce's behalf, subject to her control, and Joyce trusts Jim to so act. They set out the terms in a written document, which they both sign. This is​

An agency can terminate once its purpose is achieved.

Cory employs Dash Delivery Agency as an agent under a written agreement that describes the rights and duties of both parties. This is​

Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince's right to hold Ray liable for any damages he has to pay is the right of​

Roman is the chief executive officer of Salty Snax Corporation. Roman's responsibilities include decisions on product development, marketing, and other significant business directions. Roman is subject to the approval and oversight of Salty Snax's board of directors. Teri is a Salty Snax manager whose duties include the firm's day-to-day hiring, firing, purchasing, and selling. Umberto is a Salty Snax salesperson, whose daily activities are controlled by Teri. Velma writes sales manuals and promotional materials for Salty Snax's products according to Roman's instructions and subject to Salty Snax's control, but has no dealings with the company's customers or suppliers. Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax's control. Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?​

Dakota Energy Company employs Evan to negotiate the purchase of mineral rights for future mining projects. Evan secretly buys some of the property and sells it to Dakota at a profit. Evan has breached​

Agency relationships normally are consensual.

John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch. John makes a deal with Lawson, the owner of a local herd, and makes a down payment. Kelly fails to pay the rest of the price. Lawson sues John for breach of contract. John's right to hold Kelly liable for any damages that he has to pay is the right of​