Agency Flashcards
(17 cards)
- The owner of a business instructs his business manager to hire a technology specialist. The owner gives the manager no specifics nothing about the duties to be undertaken by the technology specialist, or the hours to be worked. or salary to be paid. The manager protests that she is not qualified to hire a technology specialist. The owner becomes angry and tells the manager that part of her managerial duties is to hire staff—he tells her to just do her job and to hire someone, or he’d be filling a position for a technology specialist and a new manager. The manager does not quit, but also does not expressly agree to undertake the obligation to hire a technology specialist.
At this point, is the manager an agent for the owner for the purpose
of hiring the technology specialist?
A. Likely yes, because the owner expressly authorized the
manager to hire the technology specialist and the manager
chose to remain in her position as manager.
B. Likely yes, because business managers customarily would
have the authority to hire staff reasonably necessary for
management of the business.
C. Likely no, because the owner failed to effectively authorize the
manager to hire a technology specialist by failing to identify
basics of the job of a technology specialist, such as duties,
hours, and salary.
D. Likely no, because the manager refused to manifest assent to
an agency relationship for the purpose of hiring a technology
specialist
Answer= A (anytime talking about agency need to talk about mutual assent)
(technology specialist fact pattern)
- Assume for purposes of the next several questions that the manager is, in fact, an agent of the owner for the purpose of hiring the technology specialist. The manager decided to run a help-wanted ad in the newspaper for the position of the technology specialist. The business regularly ran ads in that newspaper for open employment positions. When placing the ad by telephone, the manager introduced herself as the manager of the business, gave the newspaper’s ad department the business’s house account number, and orally authorized the $100 ad cost to be charged to the business’s house account. The owner did not direct the manager to run such an ad or to incur such cost, and the manager did not apprise the owner of her actions.
Which of the following is the best argument, based on
these facts, in favor of the legal conclusion that that owner
is liable to the newspaper for the $100 ad cost?
A. The manager had express actual authority to
purchase the ad.
B. The manager had implied actual authority to
purchase the ad.
C. The manager had apparent authority to purchase
the ad.
D. The manager did not incur debt in personal
capacity
Rest. 3d.: 2.02;2.03
correct answer= C
with apparent authority: this is only to 3rd parties
owner liable to newspaper, question is not about the finding which covers liability for the manager
(technology specialist fact pattern)
Which of the following fact scenarios, if true, would most effectively undercut the legal conclusion that the owner is liable to the newspaper for the $100 ad cost?
A. The owner expressly directed the manager not
to incur any ad costs.
B. It is not customary practice for a manager to
run a help-wanted ad for technology experts.
C. The manager had been fired two hours before
she placed the ad for the owner.
D. The owner authorized house account charges
at the newspaper for a maximum of $75.
Rest. 3d. 2.03:
A: is about what the owner told the manager to do. Not the correct answer
B: not the correct
- unless ad agency knew that beforehand, must notify the 3rd party.
Correct= D
if contract/relationship with P is maxed out at $75, A placed themselves in 25$ liability
Setting aside the issue of whether the owner is liable for the ad charge . . .
The manager interviews a number of people who respond to the ad, and ultimately offers the job to Tim. When accepting the job, Tim asks, “Can I expect the customary pay rate?” and the manager responds, “Of course.” No written employment contract is executed. After Tim has worked his first month, the owner learns for the first time that the customary pay rate for a
technology specialist is far more than what he expected to pay.
Is the owner bound to pay Tim at the customary rate?
A. No, because there was no contract specifying the pay rate.
B. No, because the manager lacked apparent authority to hire
Tim.
C. Yes, because the manager possessed the apparent authority
to hire Tim on the term of paying at the “customary pay rate.”
D. Yes. Although the manager lacked apparent authority, the
doctrine of estoppel applies to bind the owner.
RS 2.03
Rest. 3d. 2.03:
Apparent or actual before estoppel always estoppel last stop
correct answer= C
Which of the following is an example of an agent likely acting within her apparent authority?
A. A grocery store purchasing agent orders produce from a produce
supplier, despite an express direction to the agent from the grocery store owner not to buy from that supplier anymore, due to significant price increases. At the time that the agent placed the order, no other suppliers had the produce available for purchase, and the produce was critical to stock.
B. A grocery store checkout clerk directs the produce delivery person to “leave us all your produce, even if it is more than what we ordered. We are really short on supply!”, while the nearby store
owner says nothing in response.
C. A grocery store cake baker tells a customer that he can have a day-old cake half-off, marking down the price and giving the customer a good-humored wink, whispering, “But don’t tell my boss that I’m doing you this favor! Our little secret!”
D. All of the above.
Best answer= D
Big Box Appliance is an electronics mega-store with a football field-sized retail floor with thousands of products on display. While Shane Shopper visits the store on a busy Saturday afternoon, he is approached by a friendly middle-aged man dressed in a blue polo-style shirt and pressed khaki pants (the
standard Big Box uniform) who introduces himself as Alan. Alan is not wearing a name tag, but Shane does not notice. When Shane says that he is looking for an affordable TV, Alan
walks him over to Big Store’s selection, discussing the various models. Alan advises that he can offer Shane a discount on a particular model (for a sale price of $478.26, with tax included), if Shane pays in cash. Shane gives Alan five $100 bills and Alan ostensibly leaves to get Shane his change. Alan never returns with the change and Shane later learns that no one with the name of Alan works at Big Box Appliance and that the store does not offer “buy for cash” discounts. Shane has been duped out of $500.
Which of the following facts, if true, would most persuasively support the
conclusion that Big Box Appliance is not liable for Shane’s loss?
A. Big Box employed extensive measures to monitor it large retail floor space (including by using video cameras and undercover security officers), but “Alan” was a member of well-organized
criminal syndicate that has not hit the store before.
B. Shane noticed that Alan did not have a name tag and thought the “cash-only” discount offer was odd, but failed to further investigate these seemingly suspicious circumstances.
C. Alan was acting without any actual authority—either express or implied—and, thus, there was no agency relationship between Big Box and Alan.
D. There was no manifestation by Big Box that Alan had the authority to act on behalf of Big Box.
RS 2.05
Correct answer= A; big box did everything it possibly could so that there would not be a misrepresentation of agency on their sales floor
if fails to properly provide a safe shopping environment, then store is liable
Dan is a delivery driver for Company. He is paid by the delivery, not by the hour. He is told to whom the deliveries are to be made, but Company does not tell
him how to get to his delivery points, and does not use a GPS system to track him. Dan uses his own vehicle for deliveries and pays for his own insurance,
but is reimbursed by Company for gas and mileage. One day, Dan is sent across town to make an “urgent” delivery, and is told not to stop along the way. Nevertheless, half way there, Dan pulls into a gas station to fill-up and grab some cigarettes. When he pulls out of the gas station, his car hits another car, causing injuries to a third party.
What theory, if any, would most likely apply to make Company liable for
the injuries suffered by the third party?
A. There is no theory for imposing liability on Company because Dan was acting outside the scope of his employment at the time of the collision.
B. There is no theory for imposing liability on Company because Dan was not an agent of Company.
C. Company may be liable to the third party on a theory of an employer’s vicarious liability to a third party for employee’s tort.
D. Company may be liable to the third party on a theory of a principal’s liability to a third party in contract.
Correct Answer= C
- Susie is accepted to law school and applies to rent an apartment in a nearby building. Sam, the building manager reviews Susie’s application, checks her references, verifies her bank information and finding everything in order, signs the lease on behalf of Sally, the owner, for $500 per month. Which of the following statements is correct?
a. Sally is a principal, Sam is an agent, Susie is a third party.
b. Sam and Sally are both principals, Susie is a third party.
c. Sally is a third party, Sam is a principal, Susie is an agent.
d. None of the above.
correct answer= a
Tabitha and Thomas exchange the following emails:
Tabitha: I would like to hire you as my chauffeur when I visit Paris next week. My friend Teresa recommended you.
Thomas: Yeah, I remember Teresa. But I am already booked for next week.
Tabitha: I need someone to drive me to my business meetings and to show me the sights. Will you find me another licensed and insured limousine driver who will charge the same as you?
Thomas: Sure.
Thomas contacts Theo, another limousine driver, who agrees to drive Tabitha to her business meetings and to show her the sights. Thomas did not ask Theo if he was licensed and insured and they did not discuss the price to be charged.
Which of the following statements is true?
a. Tabitha appointed Thomas as her agent to find a chauffeur.
b. Tabitha is liable if Thomas is involved in a car accident while driving another passenger and that passenger is injured.
c. Tabitha does not have to pay Theo if it turns out that he really is not licensed and insured.
d. None of the above.
correct answer= a
- Paul owns an apartment building and hires Ann to manage it. Paul tells Ann to hire a company to cut the grass. Ann hires ABC Landscaping without telling Paul about it in advance and ABC cuts the grass. Must Paul pay the bill?
a. Yes, because Ann has express actual authority.
b. Yes, because Ann has implied actual authority.
c. Yes, because Ann has apparent authority.
d. No, because Ann did not check with Paul to see if hiring ABC was acceptable.
correct answer= a
- Paul owns an apartment building and hires Ann to manage it. He tells her to keep the place clean. Ann decides to hire a janitor to clean the building without asking Paul beforehand to approve her choice of cleaner. The janitor cleans the building. Paul has never told Ann that she cannot hire a janitor. Must Paul pay the bill?
a. Yes, because Ann has express actual authority.
b. Yes, because Ann has implied actual authority.
c. Yes, because Ann has apparent authority.
d. No, because Ann did not check with Paul to see if hiring the janitor was acceptable.
correct answer= B
- Paul owns an apartment building and hires Ann to manage it. Paul tells Ann not to hire a janitor, although all apartment managers in the area customarily hire janitors. Ann hires a janitor, who knows that Ann has the title of “manager of Paul’s building”. The janitor performs the work. Must Paul pay the bill?
a. Yes, because Ann has express actual authority.
b. Yes, because Ann has implied actual authority.
c. Yes, because Ann had apparent authority.
d. No, because Paul told Ann not to hire a janitor and she failed to follow his instructions.
correct answer= C
- Octavia is an art collector and asks Oscar to bid on some original Picasso drawings at an upcoming auction at Christel’s, a famous auction house. Octavia sends a letter to Christel’s stating as follows: “Oscar will represent me and may bid for me at your upcoming auction.” In the past, Oscar had placed bids up to $1,000,000 for Octavia. However, Octavia tells Oscar not to bid more than $750,000 for any item at this auction. Oscar attends the auction and bids $1,000,000 for a drawing entitled “Blue Acrobat”. He wins the bid. Octavia tries to renege on the sale. Will Octavia win?
a. Yes, because she told Oscar not to bid more than $750,000 and he bid $1,000,000.
b. Yes, because Christels’s should have checked with Octavia first before accepting such a high bid.
c. No, because Oscar had implied actual authority.
d. No, because Oscar had apparent authority.
correct answer= D
- Agency exists if:
A. The principal manifests assent to the agent acting on the principal’s behalf, subject to the principal’s control.
B. The agent consents to act on the principal’s behalf, subject to the principal’s control.
C. Both A & B.
D. Neither A nor B.
- _____________ is the starting point for analysis of contract actions, where an agent has entered into a contract with a third-party on behalf of the agent’s principal.
A. Authority
B. Consent
C. Vicarious liability
D. Reasonableness
- Which of the following establishes, as a matter of law, that a partnership exists for purposes of UPA (1997)?
A. The sharing of profits of a business by two or more persons.
B. The conducting of business together by two or more persons.
C. The existence of an agreement in which the parties agree that they are in a
partnership.
D. None of the above.
