Terms 1
A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).
As a noun, a person having a duty created by his or her undertaking to act primarily for another’s benefit in matters connected with the undertaking; as an adjective, a relationship founded on trust and confidence.
fiduciary
Gina buys a painting from Wilbert for her principal, Kris. If Wilbert knows that Gina is buying the painting on behalf of someone other than herself but does not know the identity of that person, Kris is:
a. a partially disclosed principal.
b. an undisclosed principal.
c. an agent for Wilbert.
d. an independent contractor working for Gina.
a. a partially disclosed principal.
Card Company hires Kirsti to buy cards from various sources on its behalf. In this relationship, Card Company is
a. an employee.
b. a principal.
c. an agent.
d. an independent contractor.
b. a principal.
Name 2 ways that an agency relationship may terminate by acts of the parties.
Lapse of Time.
Purpose Achieved.
Occurrence of a Specific Event.
Mutual Agreement.
At the Option of One Party: Revocation, if by principal; renunciation, if by agent.
One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer.
independent contractor
The act of accepting and giving legal force to an obligation that previously was not enforceable.
ratification
Funnel Cakes Corp. grants its agent Tia an exclusive territory in which to sell Funnel Cakes Corp. products. Funnel Cakes Corp. cannot compete with Tia in that territory under the principal’s duty of
a. compensation.
b. cooperation.
c. indemnification.
d. reimbursement.
b. cooperation.
Rosi holds herself out as possessing special medical skills. As an agent, she must exercise the degree of skill or care expected of
a. a person having those skills.
b. an average, unskilled person.
c. a reasonable person.
d. the principal.
a. a person having those skills.
1. How much control does the employer exercise over the details of the work?
2. Is the worker engaged in an occupation or business distinct from that of the employer?
3. Is the work usually done under the employer’s direction or by a specialist without supervision?
4. Does the employer supply the tools at the place of work?
5. For how long is the person employed?
6. What is the method of payment—by time period or at the completion of the job?
7. What degree of skill is required of the worker?
An employer’s termination of an employee’s employment in violation of the law or an employment contract.
wrongful discharge
Authority (of the agent) can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority.
implied authority
Lucy takes temporary family leave from her job at Bene Corporation to care for a new foster child. Assuming Lucy is not a key employee, on Lucy's return from the leave, Bene Corporation must:
a. fire Lucy.
b. restore Lucy to her same position or a comparable position.
c. promote Lucy to the status of a key employee.
d. none of the above choices.
b. restore Lucy to her same position or a comparable position.
Raven Walk Center employs Eric to negotiate the purchase of land to expand its Raven Walk. Eric secretly buys some of the property and sells it to Raven Walk Center at a profit. Eric has breached
a. no duty.
b. the agent’s duty of accounting.
c. the agent’s duty of loyalty.
d. the principal’s duty of compensation.
c. the agent’s duty of loyalty.
Name 2 ways an agency relationship may terminate by operation of law.
Death or insanity of principal or agent.
Impossibility.
Changed circumstances.
Bankruptcy.
War.
A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise.
employment at will
An employee’s disclosure to government authorities, upper-level managers, or the media that the employer is engaged in unsafe or illegal activities.
whistleblowing
Billy is an expert on baseball cards. Raven Card Ninjas, Inc., hires Billy to order valuable cards for its collection. Billy does not examine the quality of the cards that he orders on behalf of Raven Card Ninjas. Billy has breached
a. the duty of loyalty.
b. no duty.
c. the duty of performance.
d. the duty of notification.
c. the duty of performance.
Doug (a CPA) and Ellen (an insurance salesperson) may create an agency relationship for
a. any legal purpose.
b. any legal or illegal purpose.
c. a business purpose only.
d. no purpose.a. any legal purpose.
Public Policy
A rule requiring that an agent’s authority be in writing if the contract to be made on behalf of the principal must be in writing.
equal dignity rule
A doctrine under which a principal-employer is liable for any harm caused to a third party by an agent-employee in the course or scope of employment.
respondeat superior
Based on Oli's conduct, Percy reasonably believes that Quentin has the authority to act on Oli’s behalf even though Quentin does not have the actual authority to do so. In this circumstance, Quentin has
a. express authority.
b. fairness authority.
c. apparent authority.
d. no authority.
c. apparent authority.
Lacy is married to Mark. Lacy pays for flu shots for their children and charges the cost to Mark's account. This is
a. an agency by operation of law.
b. an agency by estoppel.
c. an agency by ratification.
d. not an agency relationship.
a. an agency by operation of law.
Agency by Ratification
Agency by Estoppel
Agency by Operation of Law