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Exam 28: Agency Law

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Question 1

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Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15-year-old boy,to operate an industrial machine.Hiring the 15 year old violates the child labor laws.What should Tom do in this situation?

A) Tom should hire Elton; he has a duty to obey Esday's instructions.
B) Tom should hire Elton; he has a duty of care to ensure that the government does not discover that Elton is 15 years old.
C) Tom should not hire Elton; he has a duty of care and he would not be caring for Elton.
D) Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical.

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Question 2

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Alex worked for years for MegaCorp.During his employment with MegaCorp,he learned a great deal of confidential information and knew that if this information got into the hands of competitors or the general public,MegaCorp could suffer great business losses.Alex claims that he was wrongfully fired by MegaCorp and accordingly he believes he has no obligation to MegaCorp to keep any information he acquired with them as confidential.MegaCorp claims that Alex is under a continuing duty to keep confidential information secret,even though he is no longer with the company.Who is right? Why?

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MegaCorp.is right.Regardless of why Alex no longer works for MegaCorp,he is under a continuing duty not to use or disclose the company's confidential information after he leaves the company.Alex had a fiduciary duty of loyalty to his employer when he worked for it and such duty does not terminate relative to trade secrets or confidential information after he is no longer employed by that company.

Question 3

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Grant is a delivery person for Watkins Furniture.One day,after delivering a chair to Nadine's house,he stopped at a fast food restaurant to get a sandwich at the drive-through window.As he was leaving the parking lot,he accidentally hit the rear of Blanche's car.Discuss the possible liability of Watkins for Grant's accident.Would there be any difference in the potential liability of Watkins if Grant had the accident after driving 30 miles away to visit a friend?

An agent may not engage in inappropriate behavior that reflects badly on the principal.This rule applies to conduct

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Mohammad was an employee in the new product development department of Estay Inc.Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months.Estay took great care to keep information concerning the new product a secret.Ceries,Inc.,a competitor of Estay,persuaded Mohammad to leave Estay to direct Ceries' marketing department.Which statement is correct?

Which of the following is NOT required of an agency relationship?

Mrs.O'Leary hired Jenna to sell her house in Michigan.She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate,acting as a prudent person." On May 30,Jenna finalized a deal with Brandon for the purchase of the house.Brandon and Jenna signed the real estate contract that day.Jenna learned the next day that Mrs.O'Leary had died May 29.

A principal is bound by contracts that an agent enters into with authority.Discuss the various types of contractual authority an agent may have.

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

The bankruptcy of an agent automatically terminates an agency relationship.

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

Which of the following persons is NOT an agent?

Circus Pizza contracted with Art to run its birthday parties.Art's responsibilities included supervising the children and organizing the games.Circus did not investigate Art's background,which included a history of assaulting children.Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party.Circus Pizza

Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

Larry decided to relocate to Germany.Larry hired Happy Homes,Inc.to find a buyer and contract for the sale of his house in the U.S.The agency relationship between Larry and Happy Homes must be evidenced with a written agreement.

Pamela hired Lena to sell her business.Lena

Cameron,editor of the local newspaper,assigned to Jim the writing of a story about pollution of a nearby stream.Although Jim used reasonable care in gathering and checking his information,unknown to Jim,the story contained a defamatory statement about Maureen.Maureen reads the story and sues Jim for libel.Cameron,who read and published the story