Question

A Which of the following statements is NOT true regarding apparent authority?

Multiple Choice

• Apparent authority is a type of actual authority.
• Apparent authority may arise from customs in the trade.
• Former agents also may possess apparent authority if the principal does not notify third persons of the termination of the agency relationship.
• A principal who is bound to a contract with a third person based on an agent’s apparent authority may sue the agent for damages.

B. Which of the following is true regarding a dual agency in which an agent acts for both parties to a transaction in a capacity in which the agent advises both parties?

Multiple Choice

• The dual agency does not constitute a violation of the duty of loyalty so long as the agent acts fairly and equitably.
• The dual agency does not constitute a violation of the duty of loyalty if at least one of the parties to the transaction is aware of the dual agency.
• The dual agency is permissible so long as both parties are fully informed as to the dual role of the agent and consent.
• The dual agency is permissible so long as the agent has worked for each of the parties in the past.

C. Pete is an employee in Chris' small golf store. Pete likes to practice his swing and likes to hit balls off a wall at the back of the store. Several times, golf balls have hit customers and other employees. Chris knows he should ask Pete to stop, but he thinks it's funny. One day, Pete "chips" a ball and hits a customer in the eye, causing severe damage. If Chris is the principal and Pete is the agent, Chris is:

Multiple Choice

• directly liable.
• immune from liability because no one had previously been seriously injured.
• protected by respondeat superior.
• immune from liability because Pete committed the wrongful act, and Chris did not directly order him to do so.

D. The standard of care and skill for a gratuitous agent is usually:

Multiple Choice

• less than that of a compensated agent.
• more than that of a compensated agent.
• equal to that of a compensated agent.
• equal to that of a compensated agent except in agreements involving personal services in which case, the standard is more than that of a compensated agent.

Answer 1

A - Apparent authority is a type of actual authority. is not true because apparent authorit and actual authority are 2 different concepts

B - The dual agency is permissible so long as both parties are fully informed as to the dual role of the agent and consent. this is because both parties can choose an agent when they know about his role with either of the parties. if one of the party is not informed it will be a misrepresentation.

C - directly liable: this is because Chris knew about the consequences and still did not stop Pete. So, as per respondeat superior doctrine he is liable for his agent's actions.

D- equal to that of a compensated agent except in agreements involving personal services in which case, the standard is more than that of a compensated agent.