Question 1

Gaye agrees to act as a sales agent for Homewood Company on a commission basis. They further agree that either party can terminate the agency relationship at will. If Homewood ends their deal, the act of termination is called

Accepted Answer

Revocation is the correct term when a principal, in this case, Homewood Company, decides to terminate the agency relationship that it has with its agent, Gaye. This term specifically refers to the principal's act of ending the agency agreement before its term or purpose is accomplished.

Question 2

Cropland Farms, LLC, hires Desiree to act as its agent to buy a certain tract of land from Ethan for $1,000 per acre. Cropland Farms does not want Ethan to know that it is the principal or that Desiree is its agent. Cropland Farms wants the land to test genetically modified seed products, and believes that Ethan may not sell the land for that purpose, or may demand a premium price if he knows that Cropland Farms is the buyer. Desiree makes the purchase, signing only her name to the contract as the buyer and not disclosing to Ethan the agency relationship. The transfer of the deed is to occur on June 1. Ethan learns of Cropland Farms' identity on May 15. Can Ethan legally refuse to deed the property on June 1? Explain.

Accepted Answer

The answer of Cropland Farms, LLC, hires Desiree to act...

Question 3

Beryl is a purchasing agent for Cable & Wire Corporation. Doyle, a Cable & Wire corporate officer, gives Beryl written authority to buy for the firm as much copper as necessary. The next day, Doyle calls Beryl and tells her to buy only a certain quantity of copper and no more. Beryl shows the written authority to Earth Resources Inc., and enters into a contract to buy more than the quantity specified by Doyle. Earth Resources ships the order to Cable & Wire. Is Cable & Wire liable to Earth Resources under the contract? Is Beryl liable? In each case, if so, why? If not, why not?

Accepted Answer

The answer of Beryl is a purchasing agent for Cable...

Question 4

Raj agrees to act as a sales agent for Service Company on a commission basis. Their contract stipulates six-months' notice of termination. The firm ends the deal without notice. If Raj seeks payment of commissions on sales for the six months following the termination, a court is most likely to hold that

Accepted Answer

The contract stipulated a six-months' notice period for termination, which Service Company did not adhere to. Therefore, Raj is entitled to the commissions for the six months following the termination as if the notice period had been respected. This is because the company breached the contract by not providing the agreed notice, and Raj would likely be entitled to damages or compensation for the breach, which would include the commissions he would have earned during the notice period.

Quiz 32: Agency Formation and Duties

Gaye agrees to act as a sales agent for Homewood Company on a commission basis. They further agree that either party can terminate the agency relationship at will. If Homewood ends their deal, the act of termination is called