Question 1

Orina hires Padget, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Padget is​

Accepted Answer

Once the house is destroyed, there is no longer anything for Padget to sell, and therefore, no reason for Orina to continue to employ Padget as her agent. The agency relationship between Orina and Padget terminates.

Question 2

Vida is a purchasing agent for Wholesome Foods with the authority to buy grain up to a certain quantity. After the grain is bought, the agency relationship terminates​

Accepted Answer

The agency relationship terminates automatically after the grain is bought. There is no need for notice to actual or potential grain sellers, or published notice in a local newspaper.

Question 3

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be​

Accepted Answer

Since Bud did not have authorization from Cody to approve the contract, Cody is not bound by the contract and did not ratify it. Therefore, Dik cannot enforce the contract and the attempt will be totally unsuccessful.

Question 4

Yoshi contracts with Zach to buy a certain pub, Aficionado's, for Yoshi, who asks Zach not to reveal her identity. Zach makes a deal with Burcet, the owner of the pub, and makes a down payment. Yoshi fails to pay the rest of the price, and does not pay Zach for his services. Does Zach have any recourse against Yoshi? If so, on what basis and to what extent?​

Accepted Answer

The answer of Yoshi contracts with Zach to buy a...

Question 5

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​

Accepted Answer

When an agent acts on behalf of an unidentified principal, both the agent and the principal can be held liable for nonperformance of the contract.

Question 6

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?​

Accepted Answer

The answer of Roman is the chief executive officer of...

Question 7

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

Accepted Answer

In this scenario, the power given to Nathalie will terminate upon Miklos's death or incapacity. This is a common provision in powers of attorney, as it ensures that the agent's authority is limited to the principal's lifetime and is not open-ended. Option A is too vague and leaves too much room for interpretation. Option C is arbitrary and not relevant to the situation. Option D is not a common provision in powers of attorney and is not relevant to the situation.

Question 8

Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely be considered acting outside the scope of her employment if she​

Accepted Answer

The answer of Picabo drives a truck as an employee...

Question 9

Churchy hires Danielle, a real estate broker, to act as his agent to sell his land for $150,000. Oil is discovered beneath the land, causing its market value to increase considerably. The agency agreement is likely​

Accepted Answer

The answer of Churchy hires Danielle, a real estate broker,...

Question 10

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. Cuisine Catering is​

Accepted Answer

Cuisine Catering is a partially disclosed principal because Berry indicated she was acting on behalf of a client, but did not reveal the client's identity.

Question 11

Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house. Sari ratifies the contract. Later, Sari tries to rescind the part of the contract relating to the exterior. This attempt will be​

Accepted Answer

Sari ratified the contract, which means she accepted all its terms including the painting of the exterior. Therefore, she cannot rescind only a part of the contract. The attempt to rescind the part of the contract relating to the exterior will be totally unsuccessful.

Question 12

Mirena serves in a representative capacity for Netanya. Orla is injured through Mirena's negligence. Netanya may be liable to Orla if Mirena's conduct occurred​

Accepted Answer

Netanya may be held liable for Orla's injuries if the conduct occurred within the course and scope of Mirena's employment. This means that Mirena was carrying out her duties as a representative of Netanya when the negligence occurred. It does not matter whether the conduct occurred during normal working hours or if Netanya was aware of Mirena's propensity for negligence. However, if the conduct occurred outside the parties' employment relationship, Netanya would not be liable.

Quiz 23: Agency Relationships in Business

Orina hires Padget, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Padget is

Vida is a purchasing agent for Wholesome Foods with the authority to buy grain up to a certain quantity. After the grain is bought, the agency relationship terminates

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be

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

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

Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely be considered acting outside the scope of her employment if she

Churchy hires Danielle, a real estate broker, to act as his agent to sell his land for $150,000. Oil is discovered beneath the land, causing its market value to increase considerably. The agency agreement is likely

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. Cuisine Catering is

Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house. Sari ratifies the contract. Later, Sari tries to rescind the part of the contract relating to the exterior. This attempt will be

Mirena serves in a representative capacity for Netanya. Orla is injured through Mirena's negligence. Netanya may be liable to Orla if Mirena's conduct occurred