Question 1: Which of the following is true of how agency relationships are created?
- Solution 1: They can be created by contract or by agreement.
Question 2: Which of the following is true of how agency relationships are created? - Solution 2: Agency relationships can be express or implied.
Which of the following is true of how agency relationships are created? - They can be created orally.
Max and Maura, a retired couple, decide to travel around the world for a year.
They need someone to manage their financial affairs while they’re gone, so they
sign a written document authorizing their daughter to act on their behalf in any
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financial matters.
Which type of agent relationship does this represent? - Power of attorney agency
Phinneas asks a travel agent to reserve a flight and hotel for his upcoming
vacation to Mexico.
Which type of agent relationship does this represent? - Special agent
Jonathan is a real estate agent. A builder tasks him with finding a suitable piece of
land for a new condo development. Once the condos are complete, John has the
exclusive right to list them.
Which type of agent relationship does this represent? - Special agent coupled with an interest
Which of the following is true of a principal’s duty to an agent? - A principal’s duty includes submitting payments to an agent.
Which of the following is true of an agent’s duty to a principal? - An agent has a fiduciary duty to a principal.
Which of the following is true of an agent’s duty to a principal? - An agent owes a duty to perform with allegiance to a principal’s interests.
Which of the following most clearly represents a lawful termination of
employment? - A lifeguard quits her job in the middle of the summer even though the pool
will not be able to find a replacement for her on such short notice.
Which of the following most clearly represents an illegal termination of
employment? - A hospital CEO fires an administrator who recently filed for bankruptcy,
because she’s concerned that other employees will lose confidence in him.
Which of the following most clearly represents a lawful termination of
employment?
24 - A restaurant manager lays off a waitress because he no longer needs as
many staff members. The manager doesn’t ask the waitress if she has another
source of income before letting her go.
Samantha signs a contract with a lawyer to help her with her divorce. The lawyer
uses a courier on a regular basis to deliver court documents. The courier sends
Samantha a bill for the services ordered by the lawyer after checking the terms of
the contract.
Is Samantha liable for the courier’s bill? - Yes, due to implied authority.
In April, Ursula quits her job as the manager of a local branch of a restaurant
chain. In May, she orders five cases of wine from the restaurant’s usual liquor
supplier. The liquor supplier charges the restaurant, since the restaurant has not
notified it of Ursula’s departure.
Is the restaurant liable for the charges? - Yes, due to apparent authority.
Greg finds a checkbook on the street that belongs to a local business. He writes a
check to himself, signs it, and cashes it at a bank across town. The owner of the
local business sues the bank to recover the money.
Is the business owner liable for the money paid to Greg? - No, the business owner is not liable.
Pacey, an insurance agent, is told by his employer at his annual review meeting
that he needs to “boost his sales of insurance policies in the next quarter by 50%.”
To meet this goal, Pacey decides to blackmail several people that he knows. He
threatens to expose their secrets unless they purchase an insurance policy from
him. Someone reports Pacey to the police and he’s arrested and charged with
blackmail.
Is Pacey’s employer liable for his criminal act? - No, the employer is not liable because it did not authorize a criminal act
Hillary is a real estate agent working with a buyer to find a new home in town. She
is authorized to assist the buyer in identifying a suitable home to purchase and
negotiating a contract. Hillary finds a house that the buyer loves, so she quickly
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decides to sign a purchase and sale contract to prevent anyone else from doing so
first.
Is Hillary personally liable for the contract when the buyer refuses to pay the
price agreed upon by Hillary and the seller? - Yes, because Hillary exceeded her authority as an agent when she signed
the contract.
