Chapter 36 – Third-Party Relations of the Principal and the Agent
V. ANSWERS TO PROBLEMS AND PROBLEM CASES
1. No on the loan, but yes on the Enron purchase. There is no actual (express or implied)
authority to purchase Enron shares or borrow from Wells Fargo, as Bravario did not expressly
manifest or communicate to Hermano that she could buy Enron shares or borrow money to do
so. Such an investment is also not within her implied authority, because it is not reasonable
2. No. There was no express authority for Mr. Opp to limit the carriers’ liability to Mrs. Opp,
because there was no evidence that Ms. Opp explicitly granted authority to Mr. Opp to bind
her to an agreement that limited the carriers’ liability for her goods. Ms. Opp never requested
or intended Mr. Opp to do anything other than open the door and allow the carriers to remove
her property. There was no implied authority, because the nature of the agency relationship
3. No. This case covers a common context: a temporary employment agency provides workers
to a business. Since the temporary employment agency (Work Connection in this case) does
not directly control its employees during the course of his work for the business (Universal in
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Chapter 36 – Third-Party Relations of the Principal and the Agent
4. No. Although the court found that any notice or knowledge received by an officer or agent
authorized to receive the same is imputed to the corporation itself, the court applied an
exception to that rule: notice or knowledge received by the agent outside the scope of the
agent’s authority is not imputed to the principal. The court noted that the exception for
5. Yes. The court held that imputation was appropriate because the Ness firm had apparent
6. Yes. The court held that the debt did not arise until after the corporate charter was forfeited.
The court also concluded that the debt did not relate back to an event that occurred prior to
7. The court held for Bradshaw in a suit based on the theory that the agent had breached his
implied warranty of authority. Reed was not successful. The documents that Reed signed but
8. Yes. Redford was Tube Art’s employee because Tube Art controlled the physical details of
the work, as well as the manner and means by which Redford dug holes, giving him the exact
9. Yes. Johnson was acting in the scope of his employment, because his conduct was the kind
that he was hired to do and his purpose was in part at least to serve his employer. He was
10. No. The court held that the franchisor could not be held liable because it had no control over
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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.
Chapter 36 – Third-Party Relations of the Principal and the Agent
the franchise employee’s intentional, tortuous conduct. Moreover, the court held that the
11. Yes. Because Bauer intends and directs her agent to make false representations, she is
12. Possibly. QGM is liable, and its agent Schimberg may be liable also. The court found that
Texas law permits corporate agents to be liable for their own torts in many instances. A
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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.