The agency relationship is a fiduciary relationship and is based upon trust, and each party owes the other the duty to act with the utmost good faith.
a.
... [Show More] True
b. False
a.True
Which of the following is NOT a duty the agent owes the principal?
a. Performance
b. Superior competence
c. Notification
d. Loyalty
e. Obedience
f. Accounting
b. Superior competence
The degree of skill or care required of an agent is usually that expected of a(n) __________person under similar circumstances.
The degree of skill or care required of an agent is usually that expected of a(n) reasonable person under similar circumstances.
A gratuitous agent may be held liable to the principal for breach of the agency contract.
a. True
b. False
b. False
The agent has the duty to act __________ for the benefit of the principal and not in the interest of the agent or a third party.
The agent has the duty to act SOLELY for the benefit of the principal and not in the interest of the agent or a third party.
An agent's actions must be strictly for the benefit of the principal and must not result in any ___ profit for the agent.
An agent's actions must be strictly for the benefit of the principal and must not result in any SECRET profit for the agent.
Which of the following is NOT a duty the principal owes the agent?
a. Compensation
b. Reimbursement and indemnification
c. Substantial ownership in the business
d. Cooperation
e. Safe working conditions
c. Substantial ownership in the business
When the principal grants an agent an exclusive territory, we say that the principal has created a(n) ____________ .
a) territorial agency
b) exclusive agency
c) gratuitous agency
d) agency by operation of law
b) exclusive agency
When an agent fails to perform his or her duties, for what may the agent be liable to the principal? Choose two.
a. Breach of contract
b. Misappropriation
c. Invasion of privacy
d. Administrative injunction
e. Tort liability
...
. An agent's authority to act for a principal:
a. may be actual or apparent.
b. must always be in writing.
c. can be expressed only.
a. may be actual or apparent.
Equal dignity rule:
In most states, a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is required to be in writing. Failure to comply can make a contract voidable at the option of the principal.
Power of attorney:
A written document, which is usually notarized, authorizing another to act as one's agent; can be special (permitting the agent to do specified acts only) or general (permitting the agent to transact all business for the principal).
Notary public:
A public official authorized to attest to the authenticity of signatures.
Express authority
power given by one party to another in clear and definite terms to act on that person's behalf
The equal dignity rule has several exceptions. For example, an executive officer of a corporation can conduct business transactions without written authority. Likewise, when an agent acts in the of a principal, the rule does not apply. Finally, when the agent's signature is merely a(n) , the agent does not need written authority to sign.
The equal dignity rule has several exceptions. For example, an executive officer of a corporation normally can conduct ordinary business transactions without written authority. Likewise, when an agent acts in the presence of a principal, the rule does not apply. Finally, when the agent's signature is merely a(n) formality , the agent does not need written authority to sign.
Ratification
The act of accepting and giving legal force to an obligation that previously was not enforceable
Apparent authority
Authority arising from what the principal causes a third party to believe. When the principal, by either word or action, causes a third party to reasonably believe that the agent has authority to act, even though the agent has no express or implied authority
implied authority
Authority to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency
An agent's implied authority can be inferred by
the position the agent occupies
. When a third party reasonably believes a person has authority to act on another's behalf, even if that person does not have such authority, the situation is known as .
apparent authority [Show Less]