1. AGENCY LAW CASE STUDIES

2. Snowmobile Sale
Sheila hired her friend Michael to sell her snowmobile, and do “whatever it takes” to sell it for $1,000. He sold it, allowing the buyer to pay in three months.
Did Michael have the authority to let the buyer delay the payment?
YES. Michael had implied authority to let the buyer delay the payment. Sheila told him to do “whatever it takes” to sell the snowmobile, and his action is reasonable.

3. When is a Clerk Not a Clerk?
Kyle went to a hardware store to purchase a saw. The clerk at the counter said he was a friend of the owner, who had gone to lunch, and asked Kyle to wait for the owner to return. Kyle was in a hurry, so he paid and left. He tried to return the tool the next day, but the owner told him that it was non-returnable.
Should Kyle be able to return the saw?
NO. The clerk told Kyle he was just a friend and asked him to wait. This is not an instance of agency by estoppel.

4. Carpenter Signs for Package
Ansar, an independent carpenter, was building a cabinet at Hudson’s home. Mrs. Hudson left to pick up her child. The doorbell rang, so Ansar opened it and signed for a package delivery. Mrs. Hudson returned and told him that she had cancelled that order and did not want the package.
Is Ansar responsible for paying for the goods?
NO. Ansar was not acting as an agent when he accepted the package. He did not purchase the item; he only attested to the delivery of the item.

5. Independent Contractor
Uma hired an independent plumber to repair her dishwasher. The plumber repaired the motor and did not check any of the other parts. Uma felt the plumber should have checked all of the mechanical parts as part of the repair service.
Does Uma have a right to tell the plumber how to repair the dishwasher?
NO. Uma cannot tell the plumber how to repair the dishwasher, as long as the repair occurs.

6. Sales Mistake
Mark was a new salesperson in an electronics store. He sold a TV to a customer and accidentally gave a 35% discount. His manager told him to be careful next time, but did not contact the customer to correct the sale. Then next day, a friend of the original customer came in and wanted to buy the same TV with the same 35% discount.
Should the second customer be allowed to receive the same discount?
YES. The manager created an agency by ratification because he did not call the first customer and correct the mistaken price that Mark had given the customer.

7. Sharing Unexpected Expenses
Jackie, a jewelry artist, was attending a one-day fair in another city. She told two other jewelry makers that she would sell their work at the fair in exchange for a commission but she wanted them to share her gas and travel expenses too. After the fair was over, Jackie was tired and decided to stay in a motel for $109.
Can Jackie ask the other artists to share in the cost of the hotel?
YES. Since the other jewelry makers agreed to pay for gas and travel expenses, a hotel stay would be appropriate.

8. Multiple Clients
Isaiah hired a public relations company to promote his new business venture. Unknown to Isaiah, the company already represented one of his competitors, who asked not to be revealed.
Is the public relations company obligated to tell Isaiah that it also represents his competition?
YES. The public relations company, as an agent, must be loyal to their principal, Isaiah. Under the duty of loyalty, agents are not allowed to work at the same time for direct competitors.

9. Tennis Pro with a Broken Arm
Shinea hired Franklin, a right-handed tennis pro, to teach at her tennis camp. Unfortunately, Franklin broke his right arm before the camp started. Frank insisted to Shinea that he could still teach tennis using his left arm.
Can Shinea discharge Frank because of his incapacitation to teach tennis?
YES. Under the theory of impossibility of performance, it is possible that Shinea could discharge Franklin and void the contract. If Franklin can still teach Shinea how to play tennis using his left arm, however, he may be able to retain his position.

10. Delivery Accident
Jorge is a senior in high school. He also works delivering piazzas using his personal car. While delivering a pizza one day, Jorge visited at a friend’s house. While parking, he hit another car and damaged it. He continued to deliver the pizza
Is the employer responsible for the damage Jorge caused the other car?
NO. If the accident happened while Jorge was stopping to visit his friend, the it is doubtful his employer would be liable unless drivers are allowed to make nondelivery stops.

11. Stock Market Crash
Rena Pellas transferred $100,000 to her stockbroker, Bill Andrews. With Pellas’s permission, Andrews invested the money in risky stocks. The portfolio soon rose to $140,000. However, the stock suddenly fell, and Andrews could not react fast enough to prevent his client from loosing $50,000.
Can Andrews be held liable for Pellas’s loss?
NO. As long as Andrews used good faith and judgment, then he cannot be held liable for the losses. Federal law dictates that stockbrokers make their clients aware of the possibility of lasses with stocks.