FINAL EXAM REVIEWCreated by Pamela S. Evers, Assoc. Prof., UNCW, for Educational Purposes ©2001 (w/updates)Call center, Cox Comm., TXTrue/False Agency is a contract in which an agent is authorized to act on behalf of, and under the control of, a principal. All employees are agents, and all agents are employees. Agents may bind a principal on the basis of apparent authority. Agency may be created unintentionally.True/False Answers TRUE. Agency is a contract in which an agent is authorized to act on behalf of, and under the control of, a principal. FALSE. All employees are agents, but some agents are independent contractors. TRUE. Agents may bind a principal on the basis of apparent authority. TRUE. Agency may be created unintentionally (through apparent authority).True/False All duties are delegable. An agent’s duty of confidentiality continues after the agency ends. To be considered actual authority, the authority must be expressed in words orally or in writing. Agency is a fiduciary relationship.True/False Answers FALSE. Not all duties are delegable (e.g., personal services). TRUE. An agent’s duty of confidentiality continues after the agency ends. TRUE. To be considered actual authority, the authority must be expressed in words orally or in writing. (express authority) TRUE. Agency is a fiduciary relationship.Multiple Choice Principals have the following duties to agent: (a) Duty to compensate (b) Duty to reimburse for reasonable expenses for doing agency business (c) Duty to indemnify the agent for losses suffered due to agency’s business (d) Both A and B (e) All of the aboveMultiple Choice Answer Principals have the following duties to agent: (a) Duty to compensate (b) Duty to reimburse for reasonable expenses for doing agency business (c) Duty to indemnify the agent for losses suffered due to agency’s business (d) Both A and B (E) ALL OF THE ABOVE! An agent is always liable for his own torts. The doctrine of respondeat superior means that a principal is liable for torts committed by employees acting within the course and scope of employment. If an agent enters into contracts for a legally existing and competent principal but lacks authority to enter contracts, the principal is not bound.True/False TRUE. Agent always liable for his own torts. TRUE. Doctrine of respondeat superior means that principal is liable for torts committed by employees acting within the course and scope of employment. NOT NECESSARILY! If an agent contracts for a legally existing and competent principal but lacks authority to enter contracts, the principal MAY BE bound IF THE AGENT HAD APPARENT AUTHORITY.True/False Answers A principal is never liable for an independent contractor’s torts. Apparent authority arises if communications by principal to third party creates reasonable appearance of authority in the agent. If a principal fails to inform the agent about a defect in the product, the principal will be directly liable for an agent’s torts.True/False FALSE. A principal MAY BE liable for an independent contractor’s torts IF FOR A DANGEROUS ACTIVITY. TRUE. Apparent authority arises if communications by principal to third party creates reasonable appearance of authority in the agent. TRUE. If principal fails to inform agent about defect in product, the principal will be directly liable for an agent’s torts.True/False Answers Carl owned a a pizza business and employed Zip to deliver pizzas. Carl knew that Zip occasionally drank beer while driving, but didn’t fire Zip. Zip injured Dan while delivering pizzas and driving drunk. Is Carl liable to Dan for Zip’s conduct? (a) No, only Zip is liable. Drunk driving was not within the scope of employment (b) Yes, since Carl knew about Zip’s drinking and negligently retained ZipMultiple Choice Carl owned a a pizza business and employed Zip to deliver pizzas. Carl knew that Zip occasionally drank beer while driving, but didn’t fire Zip. Zip injured Dan while delivering pizzas and driving drunk. Is Carl liable to Dan for Zip’s conduct? (b) Yes, since Carl knew about Zip’s drinking and negligently retained Zip. Note that a plaintiff bears the burden of proof that Carl knew about Zip’s drinking on the job! (negligent supervision)Multiple Choice Answer Carl’s Pizza hired Miller to be general manager. Miller hired Sam for pizza prep work. In general, would Carl’s Pizza be obligated to honor the contract with Sam? (a) No; only the owner of Carl’s Pizza can hire Sam, thus Sam’s contract is void (b) Yes; Miller acted with implied authority since he is general manager and Carl’s Pizza must honor Sam’s employment contract Multiple Choice Carl’s Pizza hired Miller to be general manager. Miller hired Sam for pizza prep work. In general, would Carl’s Pizza be obligated to honor the contract with Sam? (b) Yes; Miller acted with implied authority since he is general manager and Carl’s Pizza must honor Sam’s employment contract Multiple Choice Answer Employment at will is the law in all states. An employer (100 employees) may not fire a man for taking a two month leave of absence to care for his seriously-ill wife. Workers’ compensation is an employee’s exclusive remedy against an employer for covered injuriesTrue/False FALSE. Employment at will is the law in all states. Some states have limited the common law rule of employment at will. TRUE, in general!An employer (100 employees) may not fire a man for taking a two month leave of absence to care for his seriously-ill wife. (Slightly different rules for key employees.) TRUE. Workers’ compensation is an employee’s exclusive remedy against an employer for covered injuries. However, if the employee cannot obtain fair compensation, s/he may file a lawsuit in court.True/False Answers Fair Labor Standards Act prohibits any form of child work or labor by any employer engaged in interstate commerce. OSHA may not inspect a workplace or issue citations for violations of the act without a warrant issued by a judge. An employer may terminate a whistle-blower immediately because whistle-blowers make defamatory comments to the public.True/False FALSE. Fair Labor Standards Act prohibits any form of child work or labor by any employer engaged
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