Please provide correct multiple-choice selection: LAW220

1.Binding agent-principal relationships may arise in a number of ways. These include

a) conveying the impression that one person has the authority to act on behalf of another.

b) a written contract agreement between the principal and the agent.

c) a verbal agreement between the agent and the principal.

d) by estoppel.

e) all of these.

2.Ingrid was the purchasing agent for Fashion Boutique Inc. She was authorized to place orders up to $10,000, but would have to get the owner's approval for anything larger. Ingrid had made numerous purchases from Jade Clothing over the past three years. The owner of Jade was aware of Ingrid's authority to purchase merchandise, but not of any limitations on the size of the order. On January 17th , she placed an order for $13,672 without getting approval. Will Jade Clothing be able to enforce this contract?

a) No, because they were not informed of Ingrid's limitations in the agency relationship.

b) Yes, since the agent was within her actual authority.

c) No, because Ingrid was in breach of warranty of authority.

d) Yes, since the third party had no reason to believe that Ingrid did not have the authority to bind the principal.

e) No, since the increase in value of the new order is clearly outside Ingrid's authority and the principal should not be bound by her actions.

3.Although Jason had participated in the flower auction for the last nine years as an agent for Thos. Holt's Ltd. (Holt), with the authority to buy whatever he felt the store needed, on this day he was given expressinstructions to buy only cut flowers. When flats of young camellia bushes with a rare gold flower were being sold, Jason bought them on behalf of the company. Which of the following is true?

a) Holt is not bound by the contract, because Jason's authority was expressly restricted.

b) Holt is estopped from denying Jason's authority.

c) The key to determining whether or not Holt is bound by the contract is this: in the circumstances, should the auctioneer have confirmed with Holt the extent of Jason's authority?

d) Holt is not bound by the contract because Jason is in breach of his agency agreement.

e) Holt is not bound since Holt didn't ratify the contract.

4.Mr. Snarey devised and conducted a fraudulent scheme while working as an agent of Mutual Life. What would the likely result be?

a) Neither the agent nor the company could be liable, because Snarey was only an agent, and the company had no actual knowledge.

b) Only the agent was liable, because the action taken was dishonest and therefore outside the scope of the agency relationship.

c) Since Snarey was an agent with authority to enter into this general type of transaction, the company was vicariously liable for his conduct.

d) The company could be liable only if it were shown Snarey was an employee acting under the direction of a superior.

e) The third party has to make a choice of who they take legal action against. They cannot sue both.

5.Chris was a systems analyst hired to determine the best system for a retail china shop. After a careful analysis of the shop's needs and the available software, Chris presented a written report, which was approved by the owner of the business. Chris was paid his fee and was asked by the owner of the shop if he would act as agent in purchasing the hardware and software recommended in his report. The purchase wasnot to exceed $40 000 and the commission was to be $1000. Chris agreed. Read each of the following separately and indicate which is TRUE.

a) The agreement to act as agent fails to be a valid agency contract because it is not in writing.

b) If Chris buys the hardware and software himself for $36 000 and sells it to the owner for $39 000, he is entitled to his commission because the price to the owner is still less than the price allowed.

c) Chris will not be in breach of his fiduciary duty if he buys the recommended system from a firm in which he has an interest, even if he does not mention that fact to the owner.

d) Chris is entitled to accept a commission from both the seller and the purchaser, as long as the total price paid by the purchaser is less than $40 000 and the hardware and software is comparable to that recommended in the report.

e) Chris could be in breach of his duties if he delegated the task to someone else.