Chapter 35 - The Agency Relationship

Agency is a contract in which an agent is authorized to act on behalf of, and under the control of, a principal.

• True
• False

All employees are agents, and all agents are employees.

• True
• False

Agents may bind a principal on the basis of apparent authority.

• True
• False

Agency may be created unintentionally.

• True
• False

All duties are delegable.

• True
• False

An agent’s duty of confidentiality continues after the agency ends.

• True
• False

Agency is a fiduciary relationship.

• True
• False

Principals have the following duties to agent:

• Compensate
• Reimburse
• Indemnify
• All

Manuel asked his friend Sunil, a good salesman, to sell his car and Sunil agreed. Does an agency relationship exist?

• Yes, Sunil is an agent.
• Yes, if there is a written contract.
• No, friends cannot be in agency.
• No, unless Sunil ultimately sells the car.