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Exam 15: Liability of Principal and Agent; Termination of Agency

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Question 1

Multiple Choice

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Termination of agency by operation of law occurs:

A) upon renunciation of agency by the agent.
B) on the death of the principal or agent.
C) upon revocation of agency.
D) upon the expiration of a fixed period of time.
E) on the accomplishment of a specific task.

Correct Answer

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B

Question 2

Multiple Choice

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Kevin,a close friend of Dave's,borrowed Dave's car for the weekend,with Dave's permission.While driving,Kevin accidently ran into someone on the street.According to which of the following statutes would Dave be responsible or liable for Kevin's act?

A) The direct liability statute
B) The family purpose statute
C) The doctrine of estoppel
D) The owner's consent statute
E) The no-fault statute

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Question 3

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Respondeat superior is the Latin term for the shop rights doctrine.

When an agency is terminated after lapse of time or completion of work,it is said to be expressly terminated.

Under the zone of risk test an employer may be held liable for his employee's conduct even when devoted entirely to the employee's own purposes.

Which of the following is true of ratification by the principal?

The vicarious tort liability is primarily a function of agency status and not employment relationships.

Vicarious liability is not limited to harm caused in the course of an agency relationship.

The principal's unilateral termination of agency is known as _____ of agency.

The agent's unilateral termination of the agency relationship is known as _____.

The key to determining whether a principal is liable for contracts made by his agent is the amount of compensation paid to the agent.

According to the _____ standard,an employer can be held liable for his employee's conduct even when devoted entirely to the employee's own purposes,as long as it was foreseeable that the agent might act as he did.

According to the doctrine of _____,a person will not be allowed to deny a promise or assertion he/she previously made where there has been detrimental reliance on that promise or assertion.

The _____ doctrine imposes vicarious liability on the principal in case of an agency relationship.

Under the family purpose doctrine for the use of automobiles,a family member who negligently injures someone with a car subjects the owner to liability if the family member was furthering family purposes.

Differentiate between direct liability and vicarious liability of the principal.

The modern basis for vicarious liability is termed the _____ theory as it assumes that the principal is better equipped to pay damages than an agent.

Bob,a professional hockey player,asks Will to be his sports agent and Will accepts.Bob tells Will that Will can review the contracts offered to Bob from the various state hockey teams.Here,Will has _____ authority to review contracts.

Even if the agent possessed no actual authority and there was no apparent authority on which the third party could rely,the principal may still be liable if he ratifies or adopts the agent's acts before the third party withdraws from the contract.

Where a third party deals with an agent,but is unaware that he/she is dealing with an agent,the principal would be contractually bound to the third party for any tort.