Peter, who runs a retail jewelry store, went with Jen, to whom he was engaged to be married, to a wholesale jewelry store. Peter had no express, written agreement with Jen by which she was his agent. In fact, Peter had told Jen not to buy anything at the store. The wholesale jeweler, Pam, asked Peter if Jen was buying for him. Peter did not want to embarrass Jen so he nodded in agreement. A few minutes later Peter reminded Jen, outside the hearing of the wholesaler, that she should not make any purchases.

Peter and Jen had a big disagreement over money that evening, and Jen broke off their engagement. The next day Jen went back to the wholesale jeweler and purchased a string of pearls for $1,000. Jen also purchased a fur jacket for $2,500 from a store owned by Harry that was next door to the jewelry store. She told Harry that Peter wanted a fur jacket for a model in his store and that Peter would be glad to pay Harry for the jacket.

What type of agency, if any, did Jen have to act on behalf of Peter as far as Pam is concerned?

Multiple Choice

• No type of agency was in effect because no written agreement was in place by which Jen was Peter's agent.

• No type of agency was in effect because in fact, Jen was not Peter's agent.

• An expressed agency.

• An apparent agency.

• An implied agency.

Which of the following is the most likely result if Harry sues Peter for the price of the jacket?

Multiple Choice

• Harry will win, because Jen indicated that she had apparent authority to buy the jacket for Peter.

• Harry will win, but only if he can show through reasonable investigative efforts on his part that Jen cannot be located.

• Harry will win, but only if he can show that Jen has no assets with which to pay for the necklace.

• Peter will win, because he did nothing to cause Harry to believe that he would pay for the jacket.

• Peter will win on an implied agency theory.

Which of the following is the most likely result if Pam, the wholesale jeweler, sues Peter for the price of the pearls?

Multiple Choice

• Pam will lose, unless it can be established that Jen at some time in the past had actual authority to act as Peter's agent.

• Pam will lose, because it was her responsibility to ask Peter for written documentation that Jen was his agent.

• Pam will win, assuming she can prove that she reasonably believed, based on Peter's conduct, that Jen was acting as his agent.

• Pam will win, but only if she can show through reasonable investigative efforts on her part that Jen cannot be located.

• Pam will win, but only if she can show that Jen has no assets with which to pay for the necklace.