Chapter IV: Part I: Law in General (3)

=57. Authority of Agent to Warrant.= As to whether or not an agent authorized to sell personal property has implied authority to warrant its quality, is not uniformly settled. If there is any rule on the question, it probably is controlled by usage and custom. If there is a general well known custom to warrant a particular article, the agent has implied authority to warrant the quality of the article sold. If no such usage or custom exists, or if the usage or custom is purely local and not general in its application, the agent has no authority to warrant the quality of the goods sold. It must be remembered that a principal is bound by the general character of authority he confers upon his agent, by the agent's apparent authority rather than by the actual authority, unless the latter is actually brought to the notice of third parties. It has been held that an agent authorized to sell a horse is authorized to warrant the soundness of the horse, and that an agent authorized to sell reapers is authorized to warrant their durability and fitness. It was held that a principal, who authorized an agent to sell goods at a certain price, did not authorize the agent to warrant to third persons that his principal would not sell to others at a less price.

=58. Factors.= A factor, usually called a commission man or consignee, is an agent entrusted with possession of his principal's goods, and ordinarily empowered to sell in his own name. Like any agent who has possession of his principal's goods with power to sell, a factor has power to collect. He differs from a broker in that he has possession of the goods of his principal, and is authorized to sell in his own name, rather than in the name of his principal.

In the absence of contrary custom or express direction, a factor may sell on credit. A factor, until instructed otherwise, may use his discretion as to the time and price of sales, and is entitled to deduct his commission based upon custom in the absence of special contract.

A factor may sue the purchaser in his own name, for the purchase price. The principal may sue in his own name also. Persons dealing with factors may hold the principal responsible for the contracts and representations of the factor, the same as any undisclosed principal. Factors are also personally liable to third persons for their contracts.

A factor must account to his principal for money collected, less his commission and expenses. He is not obliged to keep such money separate from his own, but he must keep accurate account of same, and remit promptly when it is due, according to custom or special contact.

=59. Brokers.= A broker differs primarily from a factor in that ordinarily he does not have possession of the article dealt in, and acts in the name of his principal rather than in his own name. There are many kinds of brokers engaged in common business life. Some of these are insurance brokers, pawnbrokers, bill and note brokers, and merchandise brokers. In the absence or special authority, a broker does not have authority to collect.

=60. Auctioneers.= An auctioneer is a special kind of agent employed to dispose of goods to the highest bidder at a public sale.

Some states provide by statute that auctioneers must be licensed, and that they may charge only certain fees. Most licensed auctioneers are required to give bond. In the absence of statutory regulations, any person competent to perform the duties of an auctioneer may so act. An auctioneer differs from an ordinary agent in that, in some respects, he is agent for both seller and purchaser. He is agent for the seller in offering the goods for sale, and in obtaining bids. When the highest bid is received, however, and the hammer falls, he is deemed to be agent for the purchaser, with authority to complete the sale in the purchaser's name. If the contract of sale is within the Statute of Frauds and required to be in writing, the auctioneer has the authority of the purchaser to sign his name to a memorandum of sale, either by himself or through his clerk. The bidder is bound by this contract, made in his presence at the time and place of the sale.

The owner may fix such reasonable terms as he chooses, and the auctioneer must follow out the terms made by the owner. If an owner advertises the terms of the sale, bidders are deemed to have notice of these terms. These terms cannot be varied by the auctioneer. If, however, the owner publishes no special terms of sale, the auctioneer has implied authority to fix customary and reasonable terms. Bidders have the right to rely on such terms and the principal is bound by them.

In the absence of special instructions to the contrary, an auctioneer must sell for cash. He has possession of the goods, consequently has implied authority to receive payment of the price. He has no implied authority to warrant the goods. He cannot bid in his own interest. If bidders fraudulently combine not to bid against each other, for the purpose of obtaining the goods at a cheap price, no title passes to the highest bidder, by reason of the fraud.

So long as the auctioneer acts within his authority and reveals the name of his principal, he incurs no personal liability. But if he exceeds his authority in making a sale he is liable in damages to his principal. If he does not reveal the name of his principal to bidders, he is liable personally to them.

An auctioneer is entitled to recover from his principal the amount of his compensation, including disbursements and expenses incurred in the sale, care and preservation of the property. He is said to have a _lien_ on the goods or proceeds of the sale, for his compensation. By this is meant that he has a right to retain possession of the goods until his compensation is paid, or in the case of sale, to deduct his charges from the proceeds of the sale.

When authorized to sell goods on credit, in case payments are not made when due, the auctioneer may sue in his own name. He may also sue in his own name for wrongful acts of third parties, whereby the goods are injured. The principal also may bring this action in his own name. The principal is liable for the acts of his auctioneer, committed within the actual or apparent scope of the latter's authority.

=61. Del Credere Agency.= An agent authorized to sell is not permitted to sell on credit, unless expressly so authorized or unless the custom or usage of the particular kind of agency impliedly carries with it this power.

Some agents are, by their contracts of agency, authorized to sell on credit, on condition that they guarantee to save their principals from losses resulting therefrom. Such an agency is called a _del credere_ commission, and the agent is called a _del credere_ agent. This term means that in consideration of the agreed commission or salary paid the agent, the latter agrees to pay to the principal, when due, the sums which third parties, who buy the principal's goods from the agent, fail to pay.

This agreement to indemnify the principal against losses on credits made by the agent, is regarded as an original promise on the part of the agent, and not a promise to pay the debt of another. By reason of this attitude on the part of the courts in interpreting this contract as an original promise on the part of the _del credere_ agent to pay his own debt, and not the debt of another, the contract does not have to be in writing. (See Statute of Frauds.) For example, _A_, a manufacturer of farm machinery, employs _B_ as agent to sell farm machinery on credit, on condition that _B_ personally guarantees the sales. _B_ sells a mowing machine to _C_, to be paid for within ninety days. _C_ fails to make payment. _A_ may sue and recover the amount of the purchase price from _B_.

=62. Real Estate Brokers.= A real estate broker is one employed to make contracts involving the sale or leasing of real property. The sale of lots, of houses and lots, and farms are common examples.

A real estate broker is seldom authorized to do more than find a purchaser or tenant, not being authorized to make the lease or contract of sale. By reason of this limitation generally placed on a real estate broker's authority, many disputes arise over real estate brokers' rights to compensation. A principal may enter into any kind of contract he desires with a real estate broker, and is liable when the broker has performed his contract, and not before. The difficulty is in determining when the broker has substantially performed his contract. If _A_ hires _B_ to procure a purchaser for his house and lot, and agrees to pay him 2% of the selling price when he obtains the signature of a financially responsible purchaser to a contract of sale, _B_ is not entitled to his commission until he obtains such a party's signature to a contract. The fact that _A_ has entered into this contract with _B_, does not, in the absence of an express stipulation to the contrary, prevent _A_ from selling the property himself, or from employing as many other brokers as he pleases to attempt to make the sale.

Most brokers, however, are employed on certain terms to obtain a purchaser or tenant. If the agent succeeds in obtaining such a purchaser or tenant, the principal must pay the broker the agreed compensation. The owner cannot act unfairly by the broker. If the broker obtains a tenant or purchaser by seeking him out, and by interesting him in the property, the owner cannot avoid the payment of commission by discharging the broker and completing the deal himself. In the absence of an express agreement to give the broker a certain fixed time in which to make the sale or find a tenant, the owner may discharge the agent at any time he sees fit, just as the agent may cease his efforts at any time he chooses. The owner cannot discharge the agent just as the latter is completing the sale, in order to take advantage of the agent's efforts, without paying him the agreed compensation. The agent, in this event is held substantially to have performed his contract. Contracts with real estate brokers should be carefully drawn, and should contain express stipulations as to the powers and limitation of the broker's authority. The temptation is great on the part of both parties to claim that the sale was, or was not made, through the efforts of the broker. The contract of a real estate broker differs not at all from any other contract. The conditions are such, however, that the agreement is frequently indefinite, and it is difficult to determine when a substantial performance has been made.

In the absence of any agreed compensation, the real estate broker is entitled to receive the customary fees. In the absence of any custom regulating the commission, he is entitled to receive a reasonable compensation.

A real estate broker is not permitted to represent both parties, or to receive compensation from both parties. If a broker is promised compensation from the purchaser which he agrees to accept, without the consent of the owner, he cannot receive compensation from either party.

=63. Termination of Agency.= If an agent performs the terms of his agency, the agency is said to be terminated by performance. He ceases to be agent, by reason of having performed his contract.

If an agent is employed to act as agent for a specified time, the lapse of the stipulated time, of itself, terminates the agency.

An agency is a contract, express or implied, and it may be terminated at any time by any act of the parties thereto showing such to be their intention. There is one exception to this rule, and that is, that an agency coupled with an interest cannot be terminated by an act of one of the parties. This exception is discussed in a separate section.

Where an agency is terminated by failure or refusal of the principal, or agent to carry out his terms of the contract, the defaulting party is liable in damages to the other party. This does not prevent the termination of the agency however.

Where an agency is terminated by the failure or refusal of either party to observe the conditions of the contract of agency, the agency still subsists on the part of third persons, who have dealt with the agent, and who have not received notice of the termination. Upon revoking the agent's authority, the principal must notify third persons, who have dealt with the agent, or who have knowledge of the agency contract, and who would be likely to continue to deal with him as agent. If the principal does not give third parties such notice, he is still liable to them on contracts subsequently made by the agent in the principal's name. For example, if _A_, a wholesale druggist, employs _B_ to sell goods for one year and _C_ knows of the contract, and at the expiration of six months, _A_ discharges _B_ for failure to give him his exclusive time, _A_ must notify _C_ of _B's_ discharge, else _B_ can still bind _A_ by making contracts with _C_.

=64. Revocation of Agency by Operation of Law.= When one of the parties to an agency contract dies, becomes insane or bankrupt, the agency is said to terminate _by operation of law_. When the principal dies, the agency terminates. Death of itself, constitutes notice to third persons of the termination of the agency. This is true of all agencies except those coupled with an interest, discussed in another section. If any agent and a third person innocently make a contract in the name of the principal after the death of the principal, and without notice of the principal's death, the contract is not enforceable against the principal's estate. Death of the principal revokes the agency. Death of the agent also revokes the agency.

Insanity of the agent, or of the principal terminates an agency not coupled with an interest. It is regarded the same as death of one of the parties.

An agency is terminated by the bankruptcy of either principal or agent. Mere insolvency on the part of the principal or agent does not, of itself, terminate the agency, but bankruptcy, voluntary or involuntary, terminates it, and is of itself, notice to third persons. An innocent third person who has parted with his money on a contract made with the agent after the agency has been terminated by reason of insanity, or bankruptcy of the principal, may not enforce his contract, but may recover his money. Injury or disability of an agent, rendering it impossible for him to carry out the terms of the agency, terminates the agency.

=65. Agency Coupled with an Interest.= An agency coupled with an interest cannot be terminated by attempted revocation of the principal, nor is it terminated by death, insanity or bankruptcy of the principal or agent.

If the agent has an interest in the subject of the agency outside his interest in his compensation, he is said to have an agency coupled with an interest. Such an agency is irrevocable. _A_ pays _B_ one thousand dollars ($1,000.00) for one eighth interest in a patent, and in consideration of this purchase is given the agency to sell the patented article for a fixed commission. This constitutes an agency coupled with an interest, and is not revoked by an attempted revocation of the principal or by the principal's death. _A_ is indebted to _B_, his attorney, for one hundred dollars ($100.00). _A_ gives _B_ a note for one hundred and fifty dollars ($150.00) to collect, agreeing to pay him 10% of the amount collected, and to permit him to deduct the one hundred dollars ($100.00) indebtedness. This constitutes an agency coupled with an interest, and cannot be revoked by _A_.

To constitute an agency coupled with an interest, the interest must be coupled with the subject matter of the agency, and not merely with the compensation the agent is to receive. For example, if _A_ sends his attorney, _B_, a note to collect, agreeing to give _B_ 25% of the amount collected, this does not constitute an agency coupled with an interest, and may be revoked at any time by _A_.

QUIZ QUESTIONS

LAW IN GENERAL

1. How many classes of rights are there?

2. Name them.

3. How did men derive these rights?

4. What limitations, if any, are there to rights?

5. Have property rights always been recognized?

6. _A_ finds a watch in the street and, without making any attempt to
find the owner, keeps it. Is the right of possession in _A_?

7. In primitive times were personal or property rights more generally
recognized?

8. How were rights originally enforced?

9. How are rights enforced at present?

10. How did laws originate?

11. Define _law_.

12. What does law embrace?

13. What connection have laws with courts of justice?

14. What connection, if any, have customs to laws?

15. What is the purpose of law?

16. What class of laws is enforced for the benefit of the state?

17. _A_ steals _B's_ horse. _B_, by proper legal action, recovers
possession of the horse. Is the law enabling _B_ to recover the
horse a law for protection of citizens, or for the protection of
property?

18. What are the sources of law?

19. Do decisions of courts form any part of law? If so, what?

20. What are the New York State Reports?

21. What are the Philippine Island Reports?

22. Is the treaty existing between the United States and Japan, law? If
so what kind of law?

23. Define statutes. How are statutes enacted?

24. To what classification of law do statutes belong?

25. Is the English Constitution written or unwritten law?

26. Do customs and statutes bear any relation to each other?

27. How is the record of the state statutes kept?

28. What are the general divisions of law?

29. Is any part of the unwritten law written?

30. Is all unwritten law written?

31. Is any written law unwritten?

32. Is unwritten law stable?

33. How, if at all, can the written law of a state or country be changed?

34. Are treaties unwritten law? How, if at all, are the records of Congress kept?

35. Give a general classification of law.

36. Is there a universally recognized classification of law?

37. Define _administrative law_ and give an example.

38. Define _public law_ and give an example.

39. Define _private law_. Classify private law.

40. Define _constitutional law_.

41. Define _criminal law_ and give an example.

42. Can the heir or personal representative of a murdered man ever
recover money compensation for the murder?

43. If so, is it by means of private or public law?

44. Is a criminal tried and punished by private or by public law?

45. Define _law of procedure_ and give an example.

46. What do contracts embrace?

47. What does the word _tort_ mean?

48. Give an example of a tort.

49. Does the same act ever constitute a breach of contract, a tort, and
a crime?

50. Define _commercial law_.

CONTRACTS

1. Define _contract_.

2. Give an example of a business transaction which constitutes a
contract.

3. What is the purpose of putting important contracts in writing?

4. What is meant by _offer_?

5. Give an example of offer.

6. A coat marked $25 is placed by a merchant in a window. Does this
constitute an offer?

7. An advertisement is put in a paper advertising chairs for $7.00
each. Does this constitute an offer?

8. What is an _agreement_?

9. Is an agreement a contract?

10. Give an example of an agreement.

11. What is meant by _acceptance_?

12. Give an example of a contract having no acceptance.

13. _A_ offers to sell _B_ his watch for $10.00. _B_ offers _A_ $8.00.
Is there an acceptance? Is there a contract in the above case?

14. What is a _counter offer_? Give an example of a counter offer.

15. What is meant by the term _meeting of the minds_?

16. Give an example of an acceptance not of the exact terms of the
offer.

17. What is meant by _mutuality_?

18. Distinguish _meeting of the minds_ and _mutuality_.

19. May there be an acceptance of a contract by an act? If the above
question is answered in the affirmative, give an example.

20. Must an acceptance be communicated to the offer?

21. _A_ writes _B_, "I will sell you my horse for $150. If I do not
hear from you to the contrary by Thursday noon I will consider the
horse yours." _B_ does not reply. After Thursday noon, to whom
does the horse belong?

22. Define _option_. Give an example of an option.

23. Does an option require a consideration to render it valid?

24. What is an _element_ of a contract?

25. Give the elements of a contract.

26. How many parties to every contract?

27. What is meant by _legal age_?

28. _A_, a male, sixteen years old, contracts with _B_, a female,
eighteen years old. Can _B_ avoid the contract on the ground of
the infancy of _A_?

29. Is fraud or duress a defense to a contract?

30. How many kinds of consideration are there?

31. Is a good consideration sufficient to support a contract?

32. Define _valuable consideration_.

33. Give an example of a contract which may be supported by a good
consideration.

34. What is meant by a _sealed instrument_?

35. Is something beneficial to the promisee a sufficient consideration
to a contract?

36. _A_ promises _B_ to pay him $100 if _B_ will promise to work for
him for one month. _B_ promises. Is there a consideration to this
contract? If so, what is it?

37. Define _mutual promise_.

38. Is a mutual promise a valuable consideration? Give an example of
mutual promise.

39. Define _past consideration_. Give an example of past consideration.

40. Does a past consideration support a contract?

41. What is meant by _adequate consideration_?

42. Does a consideration have to be adequate to support a contract?

43. May adequacy of consideration be considered in determining whether
or not fraud was used in procuring a contract?

44. Give an example of a promise to do something one is already bound
to do.

45. Is a promise to do something one is already bound to do a
sufficient consideration to support a contract?

46. Give an example of illegal consideration.

47. Does an illegal consideration support a contract?

48. Do all the terms of a contract have to be express?

49. Define _express contract_.

50. A housewife orders a sack of flour from her grocer by telephone. The flour is delivered and accepted by her. Is this an implied contract?

51. Give an example of an express contract.

52. Do any contracts have every term expressly set forth?

53. Define _implied contract_.

54. Are uncertain contracts void or voidable? Give an example of an
uncertain contract.

55. Give the distinction between _unilateral_ and _bilateral_ contracts.

56. _A_ promises to sell his dog to _B_ if _B_ will promise to pay him
$5.00 the following day. _B_ promises to pay _A_ $5.00 the
following day. Is this contract unilateral or bilateral?

57. _A_ promises to pay _B_ $100 if _B_ will dig a well for _A_. _B_
digs the well. Is the contract unilateral or bilateral?

58. Distinguish _executory_ and _executed_ contracts.

59. _A_ promises to pay _B_ $5,000 if _B_ will deliver to him a deed of
his farm. _B_ delivers the deed. Is the contract executed or
executory?

60. Is the above contract executed as to _A_? Is it executory as to _B_?

61. Are infants bound by their contracts? Define _infant_.

62. Are infants' contracts void?

63. Distinguish _void_ and _voidable_.

64. Can a competent party contracting with an infant avoid the contract
on the ground of infancy of the other party?

65. Can an infant ratify a contract after becoming of legal age?

66. Explain how, if at all, an infant may ratify his contracts.

67. Define the term _necessaries_.

68. _A_, an infant, has not sufficient clothing. _B_, a merchant, sells
him a coat worth $7.00, for $14.00. Can _B_ recover anything from
_A_? If so, how much?

69. Is an infant entitled to receive his wages?

70. What is meant by _emancipation of an infant_? Is emancipation of an
infant ever implied?

71. What is meant by _novation_? Give an example of novation.

72. Are contracts made for the benefit of a third person enforceable by
such third person?

73. Are contracts of an insane person enforceable?

74. Are contracts of insane persons, intoxicated persons, and idiots
void or voidable?

75. _A_, while intoxicated, purchased a coat from _B_ for $10.00. The
following day, when sober, _A_ promises to pay for the coat. Can
_B_ enforce the contract?

76. Can an insane person make a valid contract during a lucid interval?

77. Can married women enter into contracts?

78. Do custom and usage ever enter into a contract?

79. _A_ purchases forty barrels of yellow grease from _B_, like sample
furnished. The grease arrives, ranging in color from white to black.
_B_ offers to show a custom among grease dealers, known to _A_, that
a composite sample is used in selling grease. Can he show this
custom as part of the contract?

80. Are oral contracts ever valid? Why, if at all, do some contracts
have to be in writing?

81. What is meant by the _statute of frauds_?

82. When and where did this statute originate? What was the purpose of
this statute?

83. Does the statute serve any useful purpose at the present time?

84. Do the states of this country have a _statute of frauds_, or is it
a part of their unwritten law?

85. By the terms of the _statute of frauds_ what contracts must be in
writing?

86. Are contracts covered by the Statute of Frauds illegal if not in
writing?

87. _A_ orally promises _B_ to work for him for two years for the
consideration of $2,000. Can either party enforce the contract?

88. What is meant by the term _specialty_? Are specialties included in
the Statute of Frauds?

89. Can you make an oral promissory note?

90. Can contracts be made by letter and telegraph?

91. _A_, by letter, offers _B_ $1,000 for _B's_ team of horses. _B_
mails a letter of acceptance which is lost in the mails. Is there
a valid contract?

92. _A_, by letter, offers _B_ $10 for a harness. By the following
mail, _A_ writes revoking the offer. _B_ receives the letter of
revocation five minutes after mailing his acceptance. Is the
contract revoked?

93. _A_, by letter, offers _B_ $1,000 for his racing horse and says,
"I will consider my offer accepted upon receipt of your reply."
_B's_ letter of acceptance is lost in the mail. Is there a valid
contract?

94. _A_ wires _B_ that he will pay him $100 per share for his
Pennsylvania Railroad stock. _B_ hands his telegram of acceptance
to the telegraph operator who fails to send it. The following day
_A_ wires a revocation of his offer. Is there a valid contract?

95. Does a revocation by wire or letter have to be received to be
effected?

96. Does an acceptance by wire or letter have to be received by the
offerer to constitute a valid acceptance?

97. In what respect do sealed instruments differ from ordinary
contracts?

98. At present what constitutes a seal?

99. At present is it the tendency of the law to favor sealed
instruments?

100. Are Sunday contracts void or voidable?

101. What makes Sunday contracts unenforceable?

102. What was _The Lord's Day Act_ of England?

103. What is meant by works of charity and necessity?

104. _A_ makes and delivers a promissory note to _B_ for $100 on
Sunday. Is the note enforceable?

105. What makes a contract illegal?

106. Are illegal contracts void or voidable? Give an example of an
illegal contract?

107. What is a gambling contract?

108. Are gambling contracts void?

109. Why are gambling contracts illegal?

110. Define _fraud_.

111. Is a false representation made during the formation of a contract
known by both parties to be false, a defense to the contract?

112. Give an example of a false misrepresentation which will serve to
avoid a contract?

113. Can there be duress without personal violence? Define _duress_.

114. Give an example of duress.

115. Do duress and fraud render a contract void or voidable?

116. Define _mistake_ in connection with making a contract. Define
_mistake of fact_.

117. Define _mistake of law_.

118. Does mistake of one party to a contract avoid the contract?

119. Does mistake of law avoid a contract?

120. Does mutual mistake render a contract void or voidable?

121. What is meant by a _contract impossible of performance_? Give an
example of a contract impossible of performance.

122. _A_, on April 4, enters into a contract dated April 2, by which he
promises to deliver to _B_ within twenty-four hours, five tons
of coal. Is _A_ liable on this contract?

123. Do floods, earthquakes, or lightning preventing performance excuse
performance?

124. Is a party to a contract excused from performance by reason of a
strike?

125. May a party to a contract stipulate against strikes and Acts of
God in such a manner as to avoid liability therefor?

126. If a party to a contract renders performance impossible can he
force performance?

127. What is meant by _conflict of law_?

128. Does the law of the place where a contract is made, or the law of
the place where the contract is enforced, prevail?

129. If a contract is made in one place, to be performed in another,
the law of which place prevails in the interpretation of the
contract?

130. What is meant by _assignment_ of a contract?

131. _A_, a singer, contracts to sing at _B's_ opera house for one
week. Can _A_ assign her contract to _C_, another singer? Can _B_
assign his contract to _D_?

132. What is meant by _giving notice of assignment_?

133. Is an assignment a contract?

134. What are the elements of a valid assignment?

135. Does an assignment require a consideration?

136. Write an assignment of a simple contract.

137. Define _several liability_.

138. Can a party be jointly and severally liable on the same contract?

139. If two parties are jointly liable on a contract can one of them be
sued thereon without the other?

140. If two parties are severally liable on the same contract, can both
be sued together thereon?

141. Define liability _in solido_. Give an example of liability _in
solido_.

142. How may a contract be discharged by performance? Give an example
of a contract discharged by performance.

143. What is meant by _tender_? What constitutes legal tender?

144. Does United States statute or a state statute make certain money
legal tender?

145. What kinds of money constitute legal tender?

146. _A_ owes _B_ $5.00. He tenders him the amount in nickels. Is the
tender good?

147. _A_ owes _B_ $500.00. He tenders him a certified check for the
amount. Is the tender good?

148. Can a contract be discharged by a subsequent agreement?

149. _A_ agrees to dig a well for _B_ for $10.00. Before _A_ starts
work, _B_ changes his mind, and offers _A_ $1.00 in settlement.
Is the contract discharged if _A_ accepts the $1.00?

150. Define _warranty_.

151. Give an example of warranty to a contract. 152. Does breach of
warranty discharge the contract?

153. Does breach of warranty give rise to an action for damages?

154. Define _rescission_.

155. Give an example of rescission.

156. Define _statu quo_.

157. Define _breach of contract_.

158. Give an example of breach of contract.

159. In case of breach of contract must the other party wait until the
time for performing the entire contract elapses, or may he sue
at once?

160. Define _bankruptcy_.

161. By what kind of law is bankruptcy regulated?

162. Does bankruptcy discharge a contract?

163. Define _voluntary bankruptcy_.

164. Who may become a voluntary bankrupt?

165. Define involuntary bankruptcy. Who may become an involuntary
bankrupt?

166. Define _act of bankruptcy_.

167. Enumerate acts of bankruptcy.

168. At common law could one party to a contract compel another to
perform it specifically? Under present law can a contract for
sale of personal property be enforced specifically?

169. What is the measure of damages for failure to deliver merchandise
under a contract of sale?

170. How did the court of equity originate?

171. Are juries used in courts of equity?

172. What classes of cases are tried in equity?

173. Does a court of equity have jurisdiction of a case where there is
a plain and adequate remedy at law?

174. With what kind of contracts is equity especially concerned?

175. Give an example of a contract which may be enforced specifically
by a court of equity.

176. Write a form for a simple contract between _A_ and _B_ for the
sale of a horse.

PRINCIPAL AND AGENT

1. What is meant by the term _agency_?

2. Give an example of a transaction completed by an agent.

3. Is there a limitation upon the kinds of business which may be
transacted by an agent?

4. Distinguish principal and agent from master and servant.

5. Define and give an example of _principal_.

6. Define and give an example of _agent_.

7. Define and give an example of _agency_.

8. Define _infant_.

9. Is a married woman seventeen years of age an infant?

10. May an infant be a principal?

11. Define and distinguish _void_ and _voidable contracts_.

12. May an idiot, insane, or drunken person act as principal?

13. May a corporation or partnership transact business through agents?

14. May a child eight years of age act as agent?

15. In general, what persons may act as agents?

16. May a person act as agent who is not capable of acting for himself?

17. May a person whose interests are opposed to those of his principal
act as agent?

18. May corporations or partnerships serve as agents?

19. Must an agent's authority to act as agent be in writing?

20. May an agent be appointed or authorized to act by implied contract?

21. Define and give an example of _implied contract_.

22. What is meant by _ratifying an act of an agent_.

23. Give an example of a principal's ratification of an unauthorized
act of an agent.

24. Give an example of a contract of agency which must be in writing.

25. Why must some contracts be in writing?

26. What are the principal provisions of the Statute of Frauds?

27. Must contracts of agency authorizing an agent to complete a land
transfer be in writing?

28. Must a contract authorizing an agent to procure a purchaser for a
house and lot be in writing?

29. Can a third party rely upon the statements of an agent that he has
authority to act as agent?

30. May a person do through an agent anything which he may lawfully do
by himself?

31. _A_ employs _B_ to purchase votes for an act pending in a state
legislature. Is _A_ or _B_, or both, guilty of a crime?

32. _A_ employs _B_ to paint a picture, and _B_ employs _C_ to paint
the picture. Must _A_ accept the work of _C_?

33. What things are necessary to enable a person to ratify the acts of
an alleged agent?

34. May a forgery be ratified?

35. Give a classification of agents.

36. _A_ is employed to deliver a package for _B_. What kind of an agent
is _B_?

37. Give an example of a universal agent.

38. Enumerate the duties a principal owes his agent.

39. _A_ employs _B_ to work in his garden. _B_ works for ten days, no
compensation having been agreed upon. How much, if anything, can
_B_ recover from _A_?

40. If an agent abandons his agency before the time of his agency
expires, can he recover anything for work performed? If so,
how much?

41. What duty, if any, does a principal owe to his servant as to
furnishing a safe place in which to work?

42. What rules, if any, does a servant assume?

43. In general, what are the liabilities of a principal to third
persons who deal with an agent?

44. Is a principal liable to a third person who has dealt with an
agent, who acted within the apparent but not the actual scope
of his authority?

45. Is a principal liable to third persons for lots committed by an
agent within the scope of the agent's authority?

46. Give an example of a lot or private wrong committed by an agent
while acting for his principal, for which the principal is not
liable.

47. Enumerate, in general, the duties an agent owes his principal.

48. Is an agent liable to his principal for mistakes of judgment or
discretion?

49. Is an agent who acts without compensation ever liable to his
principal for negligence? If so, give an example.

50. Enumerate, in general, the liabilities of an agent to third persons
with whom he deals.

51. _A_, an agent for _B_, sells goods to _C_, in his own name. _C_
afterwards discovers that _A_ is agent for _B_. Can _C_ hold _A_?

52. If an agent procures a contract for his principal by means of fraud
is the agent liable personally on this contract?

53. If an agent, believing he has authority to act as an agent, where
in fact he does not, reveals all the facts of his agency to a third
party with whom he is dealing, is he liable personally to such
third party if it turns out that he acted without authority?

54. Define and give an example of _undisclosed principal_.

55. Is an undisclosed principal when discovered, liable for the acts of
his agent?

56. Is an agent of an undisclosed principal personally liable to
third persons for acts of agency after the undisclosed principal is
discovered?

57. May there be an undisclosed principal to a negotiable instrument?

58. What is meant by _apparent authority_ of an agent as distinguished
from _actual authority_?

59. Give an example of an agency where the apparent authority of the
agent conflicts with the actual authority.

60. If an agent appears to have authority to act for another, but in
fact never received any authority, can third persons rely upon his
apparent authority?

61. Do customary powers belonging to an agent come within the meaning
of apparent authority?

62. May a principal limit an agent's apparent authority by printing
limitations in the agent's order sheet and in making contracts with
third persons? If so, give an example.

63. Define and give an example of _secret instructions_.

64. Can a principal evade responsibility to third persons by secret
instructions given to an agent?

65. If a third party dealing with an agent knows of the secret
instructions, is he bound by them?

66. Define and give an example of _sub-agent_.

67. Is a sub-agent responsible to the agent?

68. Is an agent ever responsible for the acts of a sub-agent?

69. What matters, if any, may an agent delegate?

70. Define and give examples of _mechanical_ and _ministerial duties_.

71. Distinguish an agency requiring personal skill, discretion,
and judgment, from one requiring the performance of ministerial or
mechanical duties.

72. When, if at all, is an agent authorized to collect?

73. Is an agent authorized to sell goods, always authorized to collect
for them?

74. Is an agent authorized to collect, authorized to take checks?

75. How should an agent authorized to sign a written instrument for his
principal, sign?

76. May an agent authorized to sign a promissory note for his
principal, sign his principal's name without his own?

77. An agent authorized to sign a written contract for his principal
signs his own name followed by the word, _agent_; _e.g._,
"_A, Agent._" Is the principal bound?

78. When, if at all, is an agent authorized to warrant the quality of
personal property sold?

79. Define _warranty_.

80. Give an example of an agent who is impliedly authorized to warrant.

81. Do usage and custom have anything to do with the agent's implied
authority to warrant?

82. Define _factor_, and give an example.

83. Do factors have possession of the goods?

84. Do factors have implied authority to collect?

85. Do factors have the right to sell goods in their own name?

86. Is a commission merchant a factor?

87. Define _broker_.

88. Distinguish _broker_ and _factor_.

89. Give an example of broker.

90. Is a real estate agent a broker, or a factor?

91. In what respect, if any, does an auctioneer differ from an ordinary
agent?

92. What is meant by _licensed auctioneers_?

93. Are auctioneers' fees ever regulated by statute?

94. What is meant by _auctioneer's lien_?

95. When, if at all, may an auctioneer sell on credit?

96. May an auctioneer make his own terms of sale? Are all third persons
bound by the terms advertised?

97. Define and give an example of _del credere_ agent.

98. Must a _del credere_ agent receive a separate consideration for his
guaranty?

99. When is a real estate agent entitled to receive his commission?

100. Does the contract of a real estate broker differ from the contract
of any other agent?

101. How may an agency be terminated?

102. Give an example of an agency terminated by lapse of time, and of
one terminated by act of parties.

103. May all agencies be terminated at the will of the parties?

104. What is meant by _notice to third persons of termination of an
agency_, and when, if at all, is this notice necessary?

105. Explain _termination of agency by operation of law_.

106. In case of termination of agency by death of principal must third
parties be notified?

107. Does injury or liability of an agent ever terminate an agency? If
so, under what circumstances?

108. Define _agency coupled with an interest_.

109. Is an agency coupled with an interest revocable at the will of
either party?

110. _A_ employs an agent at a salary of one hundred dollars per month,
promising him 1% commission in addition, on all orders taken in
excess of $1,000 per week. Is this an agency coupled with an
interest?

111. Give an example of an agency coupled with an interest.

COMMERCIAL LAW