BL 3335 FINAL EXAM QUESTIONS AND
ANSWERS 100% PASS
How is an agency relationship formed? - ANS 1. Agreement of the parties (expressed or
implied)
2. Ratification
3. Estoppel - to stop them from denying something, arises when the principal's actions have
created the appearance of an agency that does not in fact exist (ie. If landlord says rent will be
reduced, the landlord is estopped from collecting the full rent if the tenant relied of this to stay
in the building)
4. Operation of Law - often in family relationships and emergency situations
Sources of law that govern agency relationship - ANS 1. Common law (most predominant)
2. Statutory law - partners and employment relationships
3. Contracts
Issues with "outside relationships" with agencies - ANS (relationship between the principal
and 3rd party and between the agents and 3rd party)
issues:
- vicarious liability-- responsibility of the superior for acts by subordinate
- conflict of interest
- contract issues
- duty to notify
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What common law duties does the principal owe to the agent? - ANS 1. Compensation
2. Reimbursement and Indemnification
3. Cooperation
4. Safe Working Conditions
Compensation (P-->A) - ANS agent reasonable expects payment, therefore, the principal has
a duty to pay the agent for services rendered
Reimbursement and Indemnification (P-->A) - ANS - P has a duty to reimburse A for any costs
incurred on P's behalf
- P has a duty to indemnify (compensate) an agent for liabilities incurred because of authorized
and lawful acts/transactions
- P must indemnify A for the value of the benefits that an A covers on the P (specified in agency
k)
Cooperation (P-->A) - ANS P has a duty to cooperate with A and to assist the A in performing
his/her duties
Safe working conditions (P-->A) - ANS P has to provide safe working premises, equipment,
and conditions for all agents and employees (mitigate reasonable and foreseeable risks)
What common law duties does the agent owe to the principle? - ANS 1. Performance
2. Loyalty***
3. Notification
4. Obedience
5. Accounting
Duty of Performance (A-->P) - ANS A agreement to use reasonable diligence and skill in
performing work (breach of k if they set standard and didn't live up to it)
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
ANSWERS 100% PASS
How is an agency relationship formed? - ANS 1. Agreement of the parties (expressed or
implied)
2. Ratification
3. Estoppel - to stop them from denying something, arises when the principal's actions have
created the appearance of an agency that does not in fact exist (ie. If landlord says rent will be
reduced, the landlord is estopped from collecting the full rent if the tenant relied of this to stay
in the building)
4. Operation of Law - often in family relationships and emergency situations
Sources of law that govern agency relationship - ANS 1. Common law (most predominant)
2. Statutory law - partners and employment relationships
3. Contracts
Issues with "outside relationships" with agencies - ANS (relationship between the principal
and 3rd party and between the agents and 3rd party)
issues:
- vicarious liability-- responsibility of the superior for acts by subordinate
- conflict of interest
- contract issues
- duty to notify
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What common law duties does the principal owe to the agent? - ANS 1. Compensation
2. Reimbursement and Indemnification
3. Cooperation
4. Safe Working Conditions
Compensation (P-->A) - ANS agent reasonable expects payment, therefore, the principal has
a duty to pay the agent for services rendered
Reimbursement and Indemnification (P-->A) - ANS - P has a duty to reimburse A for any costs
incurred on P's behalf
- P has a duty to indemnify (compensate) an agent for liabilities incurred because of authorized
and lawful acts/transactions
- P must indemnify A for the value of the benefits that an A covers on the P (specified in agency
k)
Cooperation (P-->A) - ANS P has a duty to cooperate with A and to assist the A in performing
his/her duties
Safe working conditions (P-->A) - ANS P has to provide safe working premises, equipment,
and conditions for all agents and employees (mitigate reasonable and foreseeable risks)
What common law duties does the agent owe to the principle? - ANS 1. Performance
2. Loyalty***
3. Notification
4. Obedience
5. Accounting
Duty of Performance (A-->P) - ANS A agreement to use reasonable diligence and skill in
performing work (breach of k if they set standard and didn't live up to it)
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
