BL-162-01
March 2, 2015

Chapter 30 Review Questions

1. In this case, Alice worked as an agent of Peter. She was authorized to collect accounts. Peter wrongfully discharged Alice before the agreed upon termination of the agency. Peter failed to notify his customers of Alice’s termination. Alice continued to work as an agent and took collections from one of Peter’s clients, Tom. She also collected from a new prospect, Laura. She secured an order, collected payment, sent the order to Peter, and disappeared with the collections. Peter delivered the goods that Laura ordered. In the accounts of Tom, Peter would be unable to sue due to the fact that Alice had actual authority, which is power conferred upon by actual consent given by the principal, although Peter had terminated his agency with Alice he failed to make this known to others. Therefore Tom cannot be penalized because he was unaware of the change in agency and was still in belief that Alice was a working agent of Peter. As for Laura, she was a new prospect. Laura had reason to believe that Alice was an agent of Peter’s. Peter had delivered the goods that Laura ordered through Alice. This gives Laura the impression that Alice was a working agent because she received the order. Based off this fact pattern, Peter would be unable to receive compensation if he sues either Laura or Tom, he failed to notify them that Alice was no longer an agent of his, and he also delivered goods that were ordered through Alice after her termination. 2. In this case, Paula is a principal and sends Alvin as her agent to order hides from Ted. Alvin orders them under his name and delivers the hides to Paula, Ted learns of Paula as the principal and sends her the bill. Paula refuses to pay Ted. In this case based off the fact pattern Ted has the right to recover from either Alvin or Paula. In this case Paula would be considered an undisclosed principal. As Ted learned about Paula as principal, he may sue either Paula and consider Alvin a working agent, or he can ignore Paula as a principal and sue Alvin because that is whom he made the initial deal with. Ted would be unable to sue both, but he can recover from either one.
4. In this case Green Grocery Company hired Jones as their manager and gave her the authority to purchase supplies and goods for resale. Jones had conducted business with Brown Distributing Company but her purchases were limited to groceries. Jones had contacted Brown Distributing Company and had them deliver a television set to her house and claimed it would be used for promotional advertising. The advertising failed to develop; Jones disappeared with the television set. In this case Brown will not be able to prevail, this is because of Actual Implied Authority, which is inferred from words or conduct of the principal. In this case the agent had implied authority to make reasonable and necessary purchases for the principal, within the scope of apparent authority. Brown has to prove that Jones had the authority to make the purchase of the television set, because all previous purchases were of a different type. The Brown Company, delivered the television set not to the Green Grocery Co. but to the agent’s house, they needed to determine actual authority.
6. Helper is a delivery boy for Gunn; he delivered two packages to Mrs. Reed’s porch. Mrs. Reed asked Helper to bring the packages inside to the kitchen because they were heavy. While inside the Helper saw that Mrs. Reed was trying to move a cabinet in the dinning room, Helper saw her having difficulties and offered to help. While moving the cabinet he became distracted and ended up destroying a valuable, antique table. Mrs. Reed would be unable to sue Gunn, because they are not liable for the damage to the table based off Direct Liability of Principal; which states a principal’s liable for his own tortious conduct involving the use of agents. The damage to the table is not in scope of the responsibilities and job entitlement by Gunn, the Helper moving the cabinet it was through his own free will and as a favor to Mrs. Reed.
7. Driver picked up his friend to accompany him on a delivery for his employer, Speedy Service. The Driver had a “No Riders” sign posted on the windshield of the truck. The driver ignored, instructions from the employer by permitting an unauthorized person in the ride. The Driver ran a red light and collided with another automobile. The motorist and fried were both injured. In this case Speedy Service is liable for the injuries to the Motorist and the Driver, they would not be liable to the Friend. Due to the direct liability of principal which states a principal is liable for his own tortious conduct involving the use of agents. The Driver was still acting as an agent of Speedy Service though he had brought a friend that was his own choice. The driver was still within the scope of his employment because he was on the course required for the job.
8. Cook’s department store advertises that it maintains in its store a barbershop. Hunter is not an employee of Cook’s but rents the space for the barbershop. Jordan was getting shaved, when Hunter negligently put a deep gash into one of Jordan’s ears; that required 10 stiches. Jordan would be able to recover from Cook’s Department store. Jordan would be able to accomplish this through Apparent Authority; this is power conferred upon the agent by acts or conduct of the principal that reasonably lead a third party to believe that the agent had such power. Because Cook’s advertised the barbershop it gave reasonable belief that was a working agent of Cook’s Department Store.
15. Chris Zulliger was a chef at the Plaza Restaurant in Snowbird Ski Resort in Utah. Zulliger was instructed by his supervisor and the restaurant manager to make Mid-Gad Restaurant, which was located halfway up the mountain. Snowbird preferred that its employees ski to get to work and offer ski passes as part of their compensation. One day prior to beginning work at the Plaze, Zulliger went skiing, the restaurant manager asking him to stop at Mid- Gad before beginning work, after he skied four more runs. The last run he decided to take a route often taken by Snowbird, Zulliger decided to drop off a crest, where you are unable to see skiers below. Zulliger ran into Margaret Clover, who was below the crest. The resort would warn skiers to not jump off due to the dangerous potential it held, and they had signs instructing skiers to take it slow at that point. Clover sued Zulliger under the doctrine of respondeat superior. Respondeat Superior makes an employer liable for unauthorized torts committed by an employee in the course of his employment. I don’t believe that Snowbird should be held liable but that Zulliger should be held responsible for his actions. If Zulliger had hit Clover while making the run to the restaurant it would have fallen under respondeat superior if Zulliger hit Clover. Because Zulliger hit Clover after finishing his duties and his work for Snorbird therefore it would not follow under respondeat superior. Zulliger was acting under his own free will in going down the run. He chose to jump off a crest that he had previous knowledge that was dangerous. Therefor Zulliger should alone be sued for his actions, based off the fact pattern Clover would be unable to prevail by suing for respindeat superior.