Chapter 35 – The Agency Relationship
V. ANSWERS TO PROBLEMS AND PROBLEM CASES
1. No. Agency power to act for a principal must come from the principal. Euclid did not confer
on Del-Mar any power to act for Euclid or request Del-Mar to act for Euclid in any respect.
2. No. The court held that an e-mail domain name is sufficiently analogous to business cards,
company vehicles, and letterheads, which convey some indicia of apparent authority between
the purported principal and agent. By themselves, however, no reasonable person could
3. The court listed 13 factors from the Reid case, which is cited in the CBS Corp. case on page
956, and determined that Eisenberg was an employee. The court considered most important
the employer’s right to control the manner and means by which the product is accomplished,
4. Yes. Jarvin has breached the duties not to compete and to account. By keeping to himself—
without Merrill’s approval—the 15 clients, he is competing with Merrill. By using two other
5. The Creteaus alleged that their agent failed to inform them of material information regarding
the lodging arranged by the agent. The court refused to find the agency liable on the grounds
6. No. The court held that Vail Associates’ knowledge of Lindholm’s negotiations for the
Rickstrew property was not material. The purchase price was material, but Vail Associates
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 35 – The Agency Relationship
7. Yes. Both Grogan and Harvey breached the fiduciary duty requiring them to act with the
skill, competence, and diligence normally exercised by agents in similar circumstances. By
representing that she has an MBA degree in finance and six years’ experience, Grogan is held
8. Yes. The court granted a preliminary injunction against Luu and Nguyen on the grounds that
they could be breaching several duties encompassed by their duty of loyalty, including
9. The court held that Underwood was acting as Demming’s agent for the purpose of purchasing
the properties. Underwood clearly could have breached the fiduciary duties arising out of that
10. The court held that the Mrs. Trepanier continued to have authority to act for her husband after
he lapsed into a coma. A comatose person, the court wrote, is mentally competent while his
coma continues, as he is considered to be temporarily incapacitated, as he may recover.
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.