Question 1

"High Maintenance." Paul, who runs a retail jewelry store, went with Jane, to whom he was engaged to be married, to a wholesale jewelry store. Paul had no express, written agreement with Jane by which she was his agent. The wholesaler jeweler, Pam, asked Paul if Jane was buying for him. Paul did not want to embarrass Jane so he nodded in agreement. A few minutes later Paul whispered to Jane, outside the hearing of the wholesaler, that she should not make any purchases. Paul and Jane had a big disagreement over money that evening, and Jane broke off their engagement. The next day Jane went back to the wholesale jeweler and purchased a string of pearls for $2,000. Jane also purchased a fur jacket for $3,000 from a store, owned by Harry, that was next door to the jewelry store. She told Harry that Paul wanted a fur jacket for a model in his store and that Paul would be glad to pay Harry for the jacket.

-Which of the following is the most likely result if Pam, the wholesaler jeweler, sues Paul for the price of the pearls?

Accepted Answer

A)   Pam will win assuming that she can prove that she reasonably believed, based on Paul's conduct, that Jane was acting as his agent.
B)   Pam will lose because it was her responsibility to ask Paul for written documentation that Jane was his agent.
C)   Pam will lose unless it can be established that Jane at some time in the past had actual authority to act as Paul's agent.
D)   Pam will win only if she can show that through reasonable investigative efforts on her part Jane cannot be located.
E)   Pam will win only if she can show that Jane has no assets with which to pay for the necklace.F) A) and D)
G) D) and E)

Question 2

When must agency agreements be in writing?

Accepted Answer

First, agency agreements need to be in w...

Question 3

Which of the following is false regarding a principal's duties to an agent?

Accepted Answer

A)   An agent can sue the principal if the principal does not fulfill duties owed to the agent.
B)   An agent may be entitled to contract remedies but not tort remedies.
C)   If the principal has failed to meet duties owed to the agent, the agent can refuse to act on behalf of the principal until the failure is remedied.
D)   The principal has a duty to compensate an agent for services provided unless the parties have agreed that the agent will act gratuitously.
E)   The principal has a duty of reimbursement and indemnification to the agent for authorized expenditures.F) A) and C)
G) B) and D)

Question 4

Which of the following is a document that gives an agent authority to sign legal documents on behalf of the principal?

Accepted Answer

A)   Order of authority
B)   Power of order
C)   Legal empowerment
D)   Power of attorney
E)   Respondeat superiorF) A) and E)
G) C) and D)

Question 5

"Lakeside Property." Ronnie agreed to act as the agent of Sue in finding a piece of lakeside property for her at a good price and also in obtaining a loan for her with which to purchase the property. She agreed to pay him $500 for doing so. To assist Ronnie in his duties, Sue disclosed to him confidential information about her finances and debts. Ronnie decided that he needed help and paid Rick $300 to look for property for Sue. Rick told Ronnie about a great deal on a piece of lakeside property that Bruce had for sale. In fact, the deal was so good that Ronnie purchased the property for himself. When Sue found out about the property Ronnie bought for himself, she complained to Ronnie. He defended himself on the basis that he was not actually working for Sue when he found out about the deal. At the time, he was playing golf with Bruce. He also told Sue that he had hired Rick for $300 to assist him and that he could not be held liable because he had turned the job over to Rick. He asked Sue for reimbursement of the amount he paid Rick. Sue fired Ronnie threatening to sue him. Ronnie told Sue that he would counterclaim for the $300 owed to Rick. Only after he was fired, Ronnie disclosed to a number of parties information regarding Sue's spending habits which he thought were excessive.
-Which of the following is the most likely result if Ronnie sues Sue for the $300 paid to Rick?

Accepted Answer

A)   Ronnie will lose.
B)   Ronnie will win because an agent has an implied right to obtain help.
C)   Ronnie will win only if he can establish by a preponderance of the evidence that he acted reasonably.
D)   Ronnie will win unless Sue can establish beyond a reasonable doubt that he acted unreasonably.
E)   Ronnie will lose only if Sue can establish that Rick is incompetent to deal in real estate.F) All of the above
G) None of the above

Exam 33: Agency Formation and Duties

Correct Answer
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Correct Answer
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Which of the following is a document that gives an agent authority to sign legal documents on behalf of the principal?

Correct Answer
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When must agency agreements be in writing?

Correct Answer
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First, agency agreements need to be in w...
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Which of the following is false regarding a principal's duties to an agent?

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Exam 33: Agency Formation and Duties

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Correct AnswerverifiedShow Answer

Which of the following is a document that gives an agent authority to sign legal documents on behalf of the principal?

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When must agency agreements be in writing?

Correct AnswerverifiedFirst, agency agreements need to be in w...View AnswerShow Answer

Which of the following is false regarding a principal's duties to an agent?

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Correct Answer
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Correct Answer
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Correct Answer
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First, agency agreements need to be in w...
View Answer

Correct Answer
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