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Exam 19: Agency Relationships

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Question 21

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Fact Pattern 19-1 Nadine and Orin work at Pumps & Pipes Inc.Nadine is a sales representative who works with Pumps's customers,including contractors,government agencies,farmers,and others,as well as individual consumers.Pumps closely supervises all of its sales reps,and dictates their schedules.Orin is an engineer who works in Pumps's design department. -Refer to Fact Pattern 19-1.With respect to third parties,Orin is Pumps's​

A) employee,agent,and independent contractor.
B) employee and agent.
C) employee but not agent.
D) independent contractor.

E) A) and B)
F) None of the above

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Question 22

Multiple Choice

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Lynn,an agent for Mindwonder Games LLC,executes an unauthorized contract with NOW Marketing Inc.The deal is highly advantageous to Mindwonder,and the company ratifies the contract.The contract is​

A) valid.
B) vicarious.
C) void.
D) voidable.

E) B) and C)
F) A) and C)

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Question 23

Multiple Choice

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High Plains Distribution Inc.hires Inez to work on its shipping dock,accepting deliveries,dispatching trucks,and dealing with customers and other companies' drivers.With respect to High Plains,Inez is most likely​

Ben manages a warehouse and its inventory for Coffee Shops,Inc.To operate this part of the business,Ben's authority can be inferred​

Denny,a certified public accountant and an investor,and Ethel,an insurance salesperson and a realtor,may create an agency relationship for​

A partially disclosed principal is only partially liable to a third party for a contract made by an agent.

A disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

A principal is not normally liable for the crime of an agent committed within the scope of the agency or employment.

Garry drives a truck as an employee for Heavy Hauling,Inc.Garry would most likely be considered acting outside the scope of her employment if he​

John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch.John makes a deal with Lawson,the owner of a local herd,and makes a down payment.Kelly fails to pay the rest of the price.Lawson sues John for breach of contract.John's right to hold Kelly liable for any damages that he has to pay is the right of​

An agency by estoppel arises when the principal's actions have created the appearance of an agency that does not in fact exist.

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?​

If an agent has no authority but nevertheless contracts with a third party,the principal cannot normally be held liable on the contract.

Agency relationships normally are consensual.

Kevin is an agent for Lookout Mountain Accountants,Inc.On Lookout Mountain's behalf and at its request,Kevin pays Nathan for software designed for the management of Lookout Mountain's services.Kevin's right to obtain the amount of those payments from Lookout Mountain arises under the principal's duty of​

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

Fact Pattern 19-2 Faye works as an administrator and receptionist for Garage Door Store.The store withholds federal taxes from Faye's pay,and controls the methods and details of the performance of her work.Faye is not authorized to modify the prices or other terms of a sale at the store.Homer installs Garage Door products at the buyers' locations. -Refer to Fact Pattern 19-2.Garage Door authorizes Homer to sell garage door upgrades and accessories at the buyers' locations at prices that Homer negotiates with those buyers.With respect to sales at those locations,Homer is

An agent can represent two principals in the same transaction as long as neither of them knows about it.

A principal has the right to control an agent's conduct in matters entrusted to the agent.

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort.The agency will terminate​