LOMA 311 -388 QUESTIONS-
ANSWERED CORRECTLY SET TO
SCORE A+
Principal's Duties to Agent - Answer-• Compensation - how agent gets paid. Amount
could depend on: type of service, prior dealings, customs/trade practices of the
business. No duty to pay an agent who agrees to provide services without
compensation.
• Reimbursement - may agree to reimburse agent for expenses.
• Indemnification - compensation or reimbursement of another person's loss.
Disclosed Principal - Answer-agent enters into a contract with 3rd party on behalf of
named principal. Principal is personally liable under the contract.
Partially Disclosed Principal - Answer-agent contracts on behalf of a principal but does
not identify the principal. Agent discloses he is acting on behalf of principal, but principal
not named in contract.
Undisclosed Principal - Answer-agent purports to act on his own behalf and does not
mention the existence of a principal.
Apparent Authority - Answer-not expressly conferred on an agent, but is authority that
the principal either intentionally or negligently allows a 3rd party to believe the agent
possess. Principal is bound by agent's act.
Ratification - Answer-adoption by a principal of an act that was taken on the principal's
behalf, but without principal's authorization. By ratifying a contract, principal affirms that
he is party to a contract. Contract is then effective on date originally entered.
Agency by Ratification - Answer-ratification of an unauthorized action creates an agency
relationship.
For ratification to be effective, must be met: principal can ratify only contracts that he
authorized, agent must purported to act on behalf of a principal, principal must have full
knowledge of all material facts surrounding transaction, principal must ratify contract
within reasonable time.
Vicarious Liability - Answer-indirect liability. Every person responsible for own acts.
Employer responsible if employee commits torts as a result of the employment.
Employer not liable for torts of independent contractor.
,Joint and Several Liability - Answer-each defendant (employee and employer) is
independently liable for entire amount of damages awarded.
Warranty - Answer-promise or guarantee recognized by law that statement of fact is
true.
Warranty of Authority - Answer-guarantee recognized by law that an agent is acting on
behalf of principal. If agent does not have actual authority to act on behalf of principal,
3rd party has cause of action against the agent for breach of warranty of authority.
Three Elements to Prove Breach of Warranty of Authority - Answer-agent represents
that he has authority to act on behalf of a principal, no such authority actually exists, 3rd
party relies on misrepresentation to his detriment.
Agency Relationship can Terminate by four things - Answer-1. Act of a Party - have the
power to end relationship, but no the legal right.
2. Mutual Agreement - have legal right to agree to end agency relationship at any time
without incurring further legal liability to each other.
3. Performance of Agreement - many agreements state continue until a specified date
or until a specified purpose is accomplished. If contain specific termination provision,
agreement terminates upon the occurrence of the specified condition. Do not have to
notify other party. Have not further liabilities or duties to each other. Agency at will -
agency relationship that continues for unspecified amount of time.
4. Operation of Law - agent's authority to bind the principal automatically terminates as
a result of the operation of law rather than the result of an action of agent or principal.
Property - Answer-anything tangible or intangible that is capable of being owned by
someone.
Most property laws are state or local, not much federal regulation in US.
Real Property (real estate) - Answer-consists of land and whatever is growing on or
affixed to the land (trees, buildings, fences attached to land). Referred to immovable
property.
Personal Property - Answer-movable property. Categorized as: Tangible - an object or
thing that can be physically possessed and has value as an object. Intangible - consists
of one or more intangible legal rights that have value because the rights can be
enforced by courts (shares of stock, insurance policies, bonds).
Fixture - Answer-item of personal property that becomes part of real property (furnace is
personal, but part of house-real property).
Public Property - Answer-owned by a government entity
Private Property - Answer-owned by anyone other than a government entity.
,Security Interest - Answer-a claim against a debtor's property that gives a creditor the
right to possession of the property if debtor defaults on the underlying loan.
Transferee - Answer-party that buys the property
Transferor - Answer-party that sells the property
Gift - Answer-voluntary transfer of property ownership without exchange of
consideration
Donor - Answer-person makes the gift known
Donee - Answer-person to whom a gift is made. State law require three elements for
valid gift: donor must intend to make a gift, property must be delivered to done, donee
must accept property as gift.
Accession - Answer-person has right to all property produces and all that is added to or
united with property.
Title - Answer-a person's claim to ownership of property that is superior to anyone else's
ownership claim.
Lien - Answer-generic term used to describe a claim against property resulting from
debt or other obligation.
Good Faith Purchaser for Value - Answer-takes property free of an unknown lien or
interest in property held by another party. To qualify: buyer must make purchase in
good faith with no knowledge that anyone other than seller has an ownership interest in
property, buyer must pay a valuable consideration in exchange for the property.
Tenants in Common - Answer-two or more parties each own an undivided portion of the
property. Different people own part of land. Can sell their interest independently.
Joint Tenancy - Answer-two or more individuals own equal shares in property
Right of Survivorship - Answer-when one joint tenant dies, shares automatically passes
to surviving joint tenants. If one person transfers property, joint tenancy ends and
tenants in common begin.
Tenancy by the Entirety - Answer-both spouses have right to possess and use property
and ownership includes right of survivorship. Neither spouse can transfer ownership
without consent of other. If divorce, tenancy by entirety is dissolved and tenants in
common begin.
, Community Property - Answer-certain property owned by a married couple in which
each spouse has an undivided half interest. Income earned during a marriage is
community property.
Separate Property - Answer-belongs entirely to individual
Police Power - Answer-power to enact laws to promote public health, safety and welfare
(zoning laws, building codes).
Easement` - Answer-right to make specific uses of another person's property
(affirmative easement) or the right to prevent another from making specific uses of his
own property (negative easement).
Restrictive Covenants - Answer-place restrictions on how owners may use their
property.
Inter Vivos Transfers - Answer-transfers made during property owner's life.
Testamentary Transfers - Answer-transfers that occur after property owner's death
Fair Housing Act - Answer-prohibits discrimination in the sale, rental, financing of
dwellings based on race, color, religion, sex, etc.
Mortgage - Answer-agreement which borrower (mortgagor) transfers interest in property
to another party as security for a loan or other obligation.
Deed - Answer-written instrument that transfers title to real property from one person
(grantor) to another person (grantee).
Warranty Deed - Answer-conveys clear title to property and contains warranties that
grantor has clear title (no known defects) to property.
Quitclaim Deed - Answer-conveys whatever ownership rights grantor had in the
property when deed was executed
Recording Statute - Answer-established an administrative system for recording all
transactions that affect real property in state. Way for conflicting claims of real property
to be resolved.
Race statute - Answer-party who first records a deed to property gains a superior claim
to that property over party who later records deed to property.
Pure Notice Statute - Answer-a later grantee of property has superior title to property if
acquired the interest without knowing of an earlier grantee's claim under an unrecorded
deed.
ANSWERED CORRECTLY SET TO
SCORE A+
Principal's Duties to Agent - Answer-• Compensation - how agent gets paid. Amount
could depend on: type of service, prior dealings, customs/trade practices of the
business. No duty to pay an agent who agrees to provide services without
compensation.
• Reimbursement - may agree to reimburse agent for expenses.
• Indemnification - compensation or reimbursement of another person's loss.
Disclosed Principal - Answer-agent enters into a contract with 3rd party on behalf of
named principal. Principal is personally liable under the contract.
Partially Disclosed Principal - Answer-agent contracts on behalf of a principal but does
not identify the principal. Agent discloses he is acting on behalf of principal, but principal
not named in contract.
Undisclosed Principal - Answer-agent purports to act on his own behalf and does not
mention the existence of a principal.
Apparent Authority - Answer-not expressly conferred on an agent, but is authority that
the principal either intentionally or negligently allows a 3rd party to believe the agent
possess. Principal is bound by agent's act.
Ratification - Answer-adoption by a principal of an act that was taken on the principal's
behalf, but without principal's authorization. By ratifying a contract, principal affirms that
he is party to a contract. Contract is then effective on date originally entered.
Agency by Ratification - Answer-ratification of an unauthorized action creates an agency
relationship.
For ratification to be effective, must be met: principal can ratify only contracts that he
authorized, agent must purported to act on behalf of a principal, principal must have full
knowledge of all material facts surrounding transaction, principal must ratify contract
within reasonable time.
Vicarious Liability - Answer-indirect liability. Every person responsible for own acts.
Employer responsible if employee commits torts as a result of the employment.
Employer not liable for torts of independent contractor.
,Joint and Several Liability - Answer-each defendant (employee and employer) is
independently liable for entire amount of damages awarded.
Warranty - Answer-promise or guarantee recognized by law that statement of fact is
true.
Warranty of Authority - Answer-guarantee recognized by law that an agent is acting on
behalf of principal. If agent does not have actual authority to act on behalf of principal,
3rd party has cause of action against the agent for breach of warranty of authority.
Three Elements to Prove Breach of Warranty of Authority - Answer-agent represents
that he has authority to act on behalf of a principal, no such authority actually exists, 3rd
party relies on misrepresentation to his detriment.
Agency Relationship can Terminate by four things - Answer-1. Act of a Party - have the
power to end relationship, but no the legal right.
2. Mutual Agreement - have legal right to agree to end agency relationship at any time
without incurring further legal liability to each other.
3. Performance of Agreement - many agreements state continue until a specified date
or until a specified purpose is accomplished. If contain specific termination provision,
agreement terminates upon the occurrence of the specified condition. Do not have to
notify other party. Have not further liabilities or duties to each other. Agency at will -
agency relationship that continues for unspecified amount of time.
4. Operation of Law - agent's authority to bind the principal automatically terminates as
a result of the operation of law rather than the result of an action of agent or principal.
Property - Answer-anything tangible or intangible that is capable of being owned by
someone.
Most property laws are state or local, not much federal regulation in US.
Real Property (real estate) - Answer-consists of land and whatever is growing on or
affixed to the land (trees, buildings, fences attached to land). Referred to immovable
property.
Personal Property - Answer-movable property. Categorized as: Tangible - an object or
thing that can be physically possessed and has value as an object. Intangible - consists
of one or more intangible legal rights that have value because the rights can be
enforced by courts (shares of stock, insurance policies, bonds).
Fixture - Answer-item of personal property that becomes part of real property (furnace is
personal, but part of house-real property).
Public Property - Answer-owned by a government entity
Private Property - Answer-owned by anyone other than a government entity.
,Security Interest - Answer-a claim against a debtor's property that gives a creditor the
right to possession of the property if debtor defaults on the underlying loan.
Transferee - Answer-party that buys the property
Transferor - Answer-party that sells the property
Gift - Answer-voluntary transfer of property ownership without exchange of
consideration
Donor - Answer-person makes the gift known
Donee - Answer-person to whom a gift is made. State law require three elements for
valid gift: donor must intend to make a gift, property must be delivered to done, donee
must accept property as gift.
Accession - Answer-person has right to all property produces and all that is added to or
united with property.
Title - Answer-a person's claim to ownership of property that is superior to anyone else's
ownership claim.
Lien - Answer-generic term used to describe a claim against property resulting from
debt or other obligation.
Good Faith Purchaser for Value - Answer-takes property free of an unknown lien or
interest in property held by another party. To qualify: buyer must make purchase in
good faith with no knowledge that anyone other than seller has an ownership interest in
property, buyer must pay a valuable consideration in exchange for the property.
Tenants in Common - Answer-two or more parties each own an undivided portion of the
property. Different people own part of land. Can sell their interest independently.
Joint Tenancy - Answer-two or more individuals own equal shares in property
Right of Survivorship - Answer-when one joint tenant dies, shares automatically passes
to surviving joint tenants. If one person transfers property, joint tenancy ends and
tenants in common begin.
Tenancy by the Entirety - Answer-both spouses have right to possess and use property
and ownership includes right of survivorship. Neither spouse can transfer ownership
without consent of other. If divorce, tenancy by entirety is dissolved and tenants in
common begin.
, Community Property - Answer-certain property owned by a married couple in which
each spouse has an undivided half interest. Income earned during a marriage is
community property.
Separate Property - Answer-belongs entirely to individual
Police Power - Answer-power to enact laws to promote public health, safety and welfare
(zoning laws, building codes).
Easement` - Answer-right to make specific uses of another person's property
(affirmative easement) or the right to prevent another from making specific uses of his
own property (negative easement).
Restrictive Covenants - Answer-place restrictions on how owners may use their
property.
Inter Vivos Transfers - Answer-transfers made during property owner's life.
Testamentary Transfers - Answer-transfers that occur after property owner's death
Fair Housing Act - Answer-prohibits discrimination in the sale, rental, financing of
dwellings based on race, color, religion, sex, etc.
Mortgage - Answer-agreement which borrower (mortgagor) transfers interest in property
to another party as security for a loan or other obligation.
Deed - Answer-written instrument that transfers title to real property from one person
(grantor) to another person (grantee).
Warranty Deed - Answer-conveys clear title to property and contains warranties that
grantor has clear title (no known defects) to property.
Quitclaim Deed - Answer-conveys whatever ownership rights grantor had in the
property when deed was executed
Recording Statute - Answer-established an administrative system for recording all
transactions that affect real property in state. Way for conflicting claims of real property
to be resolved.
Race statute - Answer-party who first records a deed to property gains a superior claim
to that property over party who later records deed to property.
Pure Notice Statute - Answer-a later grantee of property has superior title to property if
acquired the interest without knowing of an earlier grantee's claim under an unrecorded
deed.
