Question 1

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Accepted Answer

A principal can be held liable for the tortious acts committed by his agent, even if the principal authorized the act. The concept of vicarious liability holds the principal responsible for the actions of his agent, as long as the agent was acting within the scope of his employment or agency.

Question 2

Rena employs James, a real estate broker, to find a buyer for her home for a price of at least $125,000.James has the actual implied authority to contract for the sale of Rena's home.

Accepted Answer

James, as a real estate broker, typically has the authority to market the property and find potential buyers, but he does not have the implied authority to enter into contracts for the sale of the property on behalf of the owner without specific authorization.

Question 3

Arthur is authorized to collect accounts for Peter.Peter dies, and there is no notice given to Theresa, who pays Arthur, as she has done in the past.Under the rules of the Third Restatement and the Uniform Durable Power of Attorney Act, if Arthur absconds with the money, Theresa will not have to pay again.

Accepted Answer

Since Theresa had no notice of Peter's death and acted in good faith by paying Arthur, under the rules of the Third Restatement and the Uniform Durable Power of Attorney Act, her payment is considered valid, and she would not be liable to pay again.

Question 4

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

Accepted Answer

The answer of Apparent authority can arise where there is...

Question 5

An agent is not personally liable for the torts he commits while in the scope of his employment.

Accepted Answer

An agent can be personally liable for torts he commits while in the scope of his employment, especially if the actions are intentional or negligent. The principle of vicarious liability does not absolve the agent from personal liability for his own wrongful acts.

Question 6

Apparent authority may arise by an agent's showing a third party a document from the principal authorizing the agent to enter into such a transaction.

Accepted Answer

This statement is true. Apparent authority can arise through various means, including the agent showing a third party a document from the principal authorizing the agent to enter into a transaction on their behalf. This can give the third party the impression that the agent has the authority to act on behalf of the principal, even if the agent may not actually possess that authority.

Question 7

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the scope of his employment.

Accepted Answer

The doctrine of respondeat superior holds employers liable for the actions of their employees if they were acting within the scope of their employment. Therefore, the liability of an employer under this doctrine is limited to the wrongdoing by the employee within the scope of their employment.

Question 8

Apparent authority is not actual authority.

Accepted Answer

Apparent authority refers to a situation where a person or entity may appear to have authority to act on behalf of another, but in fact, they do not. This can happen, for example, when a person is given the appearance of authority by someone who does have actual authority, but who has not communicated the limits of that authority to others. As such, apparent authority is not the same as actual authority, which refers to the legal power or right to act on behalf of another.

Question 9

Usually in cases where there is a known principal, the agent has liability for, and rights under, contracts made on behalf of a principal.

Accepted Answer

In cases where there is a known principal, the agent typically does not have liability for, nor rights under, contracts made on behalf of the principal, as the principal is the one entering into the contract through the agent's actions.

Question 10

Upon the termination of an agency, the agent's actual authority ceases.However, apparent authority may continue until actual notice of the termination is given to third parties.

Accepted Answer

Upon termination of agency, the agent's actual authority ceases immediately but the apparent authority may continue until third parties receive actual notice of termination.

Question 11

Vista Properties, Inc.hires Lance to manage its 144-unit apartment complex.No provision for expenses is made in the contracts.If  Lance arranges for a repairperson to do ordinary maintenance,  he will be personally liable for these expenses, because he has no authority to incur them.

Accepted Answer

Since there is no provision for expenses in the contracts, it is likely that Vista Properties, Inc. would be responsible for covering the expenses incurred for ordinary maintenance, not Lance.

Question 12

A principal may be liable where his agent sells liquor to an underage person even though the principal did not authorize the act.

Accepted Answer

A principal may be held liable for the actions of his agent if the agent was acting within the scope of his employment. Selling alcohol to a minor is illegal and if the agent does so while on the job, the principal can be held responsible for any damages or injuries that result.

Question 13

Roger is the promoter of a new corporation.On behalf of the as yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The corporation is liable on the contract, because Roger is its agent.

Accepted Answer

Since the corporation was not yet formed at the time Roger signed the lease, it cannot be held liable for the contract. Roger, having signed in his own name for a non-existent entity, would personally be liable unless the corporation, once formed, adopts the lease.

Question 14

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

Accepted Answer

The answer of Ordinarily, an agent may delegate his duties...

Question 15

Unless otherwise agreed, an agent making a contract with actual or apparent authority on behalf of an unidentified principal is a party to the contract.

Accepted Answer

If the principal is unidentified, the agent becomes a party to the contract unless it is otherwise agreed upon.

Question 16

In general, an undisclosed principal and the third party to a contract are contractually bound if the agent acts within the scope of his actual authority in making the contract.

Accepted Answer

If an agent is acting within the scope of their actual authority (even if the principal's identity is not known), the third party is still bound to the contract.

Question 17

Nell exceeds her authority when making a contract for Denver.If he ratifies the contract, both Nell and Denver are in the same position as the one they would have been in had Denver actually authorized the act originally except that Nell is not entitled to compensation.

Accepted Answer

If Denver ratifies the contract, both Nell and Denver are indeed in the same position as if Denver had authorized the act originally, including Nell potentially being entitled to compensation if such terms were agreed upon or implied by their relationship or the circumstances. Ratification retroactively authorizes the agent's actions, aligning the legal and financial positions as if initial authorization was given.

Question 18

A subagent owes a fiduciary duty to both the agent and to the principal.

Accepted Answer

A subagent acts on behalf of the agent and is an extension of the agent's duties and responsibilities to the principal. Therefore, the subagent owes a fiduciary duty to both the agent and the principal.

Question 19

Without authority, Donegal makes a contract with Evan, supposedly on behalf of Shawna.Shawna may ratify the contract, even if Evan loses contractual capacity before she ratifies the contract.

Accepted Answer

The answer of Without authority, Donegal makes a contract with...

Question 20

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

Accepted Answer

As a general rule, an agent is liable for any contracts entered into on behalf of an unidentified principal, even if the principal’s identity is not disclosed. This means that if the agent enters into a contract with a third party without revealing the identity of the principal, the agent will be held liable for the performance of the contract, even if the principal is unwilling or unable to perform. However, if the principal’s identity is later revealed, the third party may have the option to hold the principal liable instead.

Quiz 29: Relationship With Third Partiespart Vii: Business Associations