Bar Exam (Uniform) Quiz: Principal Liability For Agent Actions

20 questions · exam conditions

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Principal Liability For Agent ActionsQuestion 1 of 20

A CEO of a technology company had actual express authority from the board of directors to enter into contracts for software licensing up to $1 million. The CEO entered into two contracts with a vendor. The first was a software licensing agreement for $900,000. The second, signed on the same day, was an agreement to purchase consulting services from the same vendor for $200,000. The board had not authorized the purchase of consulting services. Both contracts were part of a single negotiated deal.

Is the technology company bound by the contract for consulting services? Select one.

Yes, because the CEO had apparent authority to enter into contracts related to the company's technology needs.

Yes, because the total value of the deal, $1.1 million, was a minor deviation from the CEO's authorized limit.

No, because the CEO lacked actual authority to purchase consulting services, which is a distinct transaction from software licensing.

No, because bundling an unauthorized contract with an authorized one voids both agreements.

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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Principal Liability For Agent Actions

Practice Principal Liability For Agent Actions in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Principal Liability For Agent Actions, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Is the technology company bound by the contract for consulting services? Select one.

Yes, because the CEO had apparent authority to enter into contracts related to the company's technology needs. (correct answer)
Yes, because the total value of the deal, $1.1 million, was a minor deviation from the CEO's authorized limit.
No, because the CEO lacked actual authority to purchase consulting services, which is a distinct transaction from software licensing.
No, because bundling an unauthorized contract with an authorized one voids both agreements.

Explanation: The correct answer is A. A CEO typically has broad apparent authority to enter into contracts in the ordinary course of the company's business. Third parties, like the vendor, would reasonably believe that a CEO has the authority to purchase consulting services related to a major software acquisition. Even if the CEO lacked actual authority from the board for this specific type of contract, the corporation is bound by the CEO's apparent authority based on their position. C is incorrect because the lack of actual authority is not dispositive when apparent authority exists. B is incorrect because the issue is not the dollar amount but the type of contract; the CEO exceeded the scope of their express authority, not just the amount. D is incorrect as there is no rule that automatically voids an authorized contract when it is bundled with an unauthorized one; the contracts are analyzed separately for enforceability.

Question 2

A food delivery service classifies its drivers as independent contractors. The service requires drivers to use their own cars and phones, and allows them to set their own hours and accept or reject any delivery request through an app. However, the service also sets the delivery fees, handles all payments from customers, and requires drivers to wear a uniform and use a branded delivery bag. A driver, while rushing to complete a delivery, negligently struck a pedestrian.

In a suit by the pedestrian, what is the strongest argument that the delivery service is vicariously liable for the driver's negligence? Select one.

The service is liable because it is engaged in the inherently dangerous activity of urban delivery.
The service is liable because the driver was acting for its economic benefit at the time of the accident.
The service is liable if a court determines that its level of control makes the driver an employee rather than an independent contractor. (correct answer)
The service is liable because it failed to properly train the driver on safe driving practices.

Explanation: The correct answer is C. The central issue for vicarious liability is whether the driver is an employee or an independent contractor. The key test is the degree of control the principal exercises over the agent's work. While some factors suggest independent contractor status (own car, flexible hours), other factors (setting fees, requiring uniforms and branded bags) suggest an employment relationship. The pedestrian's strongest argument is that the company's control is sufficient to classify the driver as an employee, thus triggering respondeat superior. A is incorrect because urban delivery is not considered an inherently dangerous activity. B is incorrect because acting for the principal's economic benefit is a necessary but not sufficient condition for vicarious liability; the agent must be an employee acting within the scope of employment. D asserts direct liability for negligent training, which is a different theory and may be harder to prove than vicarious liability based on employment status.

Question 3

An art gallery owner authorized an employee to purchase a specific painting from a private seller for up to $50,000. The employee, knowing the seller was desperate, offered only $30,000, which the seller rejected. Without authority, the employee then signed a contract to purchase a different, more expensive sculpture from the same seller for $60,000 on the gallery's behalf. When the owner learned of the transaction, she was initially furious. However, after an art critic praised the sculpture, the owner displayed it in the gallery's front window and included it in a new promotional brochure.

Is the gallery bound by the contract to purchase the sculpture? Select one.

No, because the employee exceeded the scope of her actual and apparent authority.
No, because a principal cannot ratify a contract that is fundamentally different from the one originally authorized.
Yes, because the employee had apparent authority to purchase art for the gallery.
Yes, because the owner's actions constituted ratification of the unauthorized contract. (correct answer)

Explanation: The correct answer is D. The employee acted without actual or apparent authority to buy the sculpture. However, a principal can become bound by an agent's unauthorized act through ratification. Ratification occurs when the principal, with knowledge of all material facts of the transaction, manifests assent to be bound or acts in a way that is consistent only with an intent to be bound, such as by accepting the benefits of the contract. By displaying the sculpture and using it for promotion, the owner accepted the benefits, thereby ratifying the contract. A is incorrect because ratification can bind the principal even if the agent initially lacked all authority. B is incorrect because a principal can ratify any contract as long as they know the material facts. C is incorrect because the facts do not establish that the employee had apparent authority to purchase a $60,000 sculpture; her authority was limited to a specific painting.

Question 4

A property management company was appointed as the general manager for a large apartment complex. The management agreement did not explicitly grant the company the authority to hire staff, but it did require the company to 'handle all day-to-day operations, including maintenance and resident services.' To address frequent plumbing issues, the management company hired a full-time, on-site plumber under a one-year employment contract. The owner of the complex claims the management company lacked authority for this hiring.

Is the apartment complex owner bound by the employment contract with the plumber? Select one.

No, because the management company lacked express authority to enter into employment contracts.
No, because hiring an employee for a one-year term is an extraordinary act requiring specific authorization.
Yes, because the authority to handle day-to-day operations created apparent authority to hire necessary personnel.
Yes, because the management company had actual implied authority to hire personnel necessary to carry out its duties. (correct answer)

Explanation: The correct answer is D. Actual implied authority (or implied authority) is authority that the agent reasonably believes she has as a result of the principal's actions. It includes authority to do acts that are necessary or incidental to achieving the principal's objectives. As the general manager responsible for day-to-day operations and maintenance, the management company would reasonably believe it had the authority to hire an on-site plumber to address frequent plumbing issues, as this is necessary to perform its duties. A is incorrect because authority can be implied even if not express. B is incorrect because hiring a maintenance worker is typically considered part of ordinary operations for a large apartment complex, not an extraordinary act. C is incorrect because apparent authority arises from the principal's manifestations to a third party (the plumber), not from the agreement between the principal and agent. The authority here stems from the necessities of the agent's assigned task, which is actual implied authority.

Question 5

A car dealership's finance manager met with a customer to finalize a car loan. The customer mentioned she was worried about her credit score. The manager, who had no authority to do so, told the customer, 'Don't worry, for a $500 fee paid directly to me in cash, I can guarantee loan approval through our special financing partner.' The customer paid the $500. The manager pocketed the money and processed the loan application normally, and it was denied. The customer sued the dealership for fraud.

Is the dealership likely liable for the finance manager's misrepresentation? Select one.

No, because the manager was acting entirely for his own benefit and not in furtherance of the dealership's business.
Yes, because the dealership placed the manager in a position that enabled him to commit the fraud. (correct answer)
No, because the customer should have been suspicious of a request for a separate cash payment.
Yes, but only if the dealership was negligent in hiring or supervising the finance manager.

Explanation: This question tests vicarious liability principles, specifically when an employer can be held liable for an employee's fraudulent conduct. The key issue is whether the dealership created the conditions that enabled the manager's fraud, even though he acted for personal gain. The dealership is likely liable because it placed the finance manager in a position of apparent authority that enabled him to commit fraud. When employers put employees in positions where they can credibly represent the company's interests to customers, the employer becomes responsible for misuse of that position. Here, the manager met with the customer in his official capacity, discussing financing options that were clearly within his apparent scope of authority. The customer reasonably believed she was dealing with an authorized dealership representative, making the dealership liable for his misrepresentations. Answer A is wrong because an employee acting for personal benefit doesn't automatically shield the employer from liability when the employee's position enabled the misconduct. Answer C incorrectly places the burden on the customer to detect fraud rather than recognizing the manager's apparent authority. Answer D is wrong because vicarious liability doesn't require proof of negligent hiring or supervision - it can arise simply from placing someone in a position of trust and authority. Remember that apparent authority is crucial in vicarious liability cases. When employees can credibly appear to act within their scope of employment, employers face liability even for unauthorized personal schemes. Focus on whether the employee's position enabled the misconduct, not just whether they were acting for the employer's benefit.

Question 6

Two friends decided to purchase a food truck together. They orally agreed to split profits and losses equally and to share management responsibilities. One friend primarily handled cooking and supplies, while the other handled marketing and driving. While driving the truck to a food festival, the friend responsible for driving negligently caused an accident, injuring another driver. The injured driver sued both friends personally.

Is the friend who was not driving the truck liable for the other friend's negligence? Select one.

No, because there was no written partnership agreement.
Yes, because the two friends were engaged in a joint venture, making each liable for the other's torts within the scope of the business. (correct answer)
No, because only the person who committed the negligent act is liable for the resulting harm.
Yes, but only to the extent of her capital contribution to the food truck business.

Explanation: When you encounter a question about business relationships and liability, focus on identifying the legal structure and understanding how that affects each party's responsibility for the other's actions. Here, two friends created a joint venture by orally agreeing to share profits, losses, and management duties of their food truck business. In joint ventures and partnerships, each participant can be held liable for the torts committed by other participants when those torts occur within the scope of the business activities. Since the driving friend was performing business duties (transporting the truck to a food festival), the negligent driving occurred within the scope of their joint venture, making both friends liable to the injured party. Option A is incorrect because oral agreements can create valid partnerships and joint ventures—written agreements aren't required for liability purposes. Option C misunderstands joint venture liability; it would be correct for independent parties, but not for business partners who share management and profits. The driving friend isn't acting as a mere individual here, but as part of a joint business enterprise. Option D incorrectly applies limited liability principles that don't exist in general partnerships or joint ventures—partners face unlimited personal liability, not liability limited to their capital contributions. Remember this key distinction: when people merely work together on a project, only the wrongdoer is liable. But when they form a true partnership or joint venture (sharing profits, losses, and management), each partner becomes liable for the business-related torts of the others. Look for profit-sharing and shared management as the key indicators of this enhanced liability.

Question 7

A client hired your law firm to handle a complex litigation matter. A senior partner at the firm assigned a junior associate to draft a summary judgment motion. The associate, who was an employee of the firm, negligently missed a key legal argument, and as a result, the motion was denied, and the client's case was severely prejudiced. The client has threatened to sue the senior partner personally for malpractice based on the associate's negligence.

Is the senior partner personally liable for the junior associate's negligence? Select one.

Yes, because the senior partner had a non-delegable duty to the client.
Yes, under the doctrine of respondeat superior, because the partner supervised the associate.
No, because only the law firm as a legal entity is liable for the negligence of its employees.
No, unless the senior partner was independently negligent in supervising the associate or assigning the task. (correct answer)

Explanation: The correct answer is D. A principal or supervisor is not vicariously liable for the torts of their agent or subordinate merely because of the relationship. Liability must flow from respondeat superior (making the employer/firm liable) or from the principal's own fault. The senior partner, as an individual, would only be personally liable if they were themselves negligent, for example, by failing to adequately supervise the junior associate, by assigning a task they knew the associate was unqualified for, or by failing to review the work product. B is incorrect because respondeat superior makes the employer (the law firm) liable, not a co-employee or supervisor in their personal capacity. A is incorrect because while the firm has a non-delegable duty, this doesn't automatically create personal liability for a supervising partner without their own negligence. C is incorrect because individual tortfeasors (including negligent supervisors) can be held personally liable alongside the firm.

Question 8

A national shipping company employed a driver to make deliveries in a major city. The driver's assigned route ended at 5:00 p.m. at a warehouse on the west side of the city. One day, after making his last delivery at 4:30 p.m., the driver decided to visit his mother, who lived ten miles east of the warehouse, in the opposite direction of his return route. While en route to his mother's house, the driver negligently ran a red light and struck a pedestrian.

Is the shipping company vicariously liable for the pedestrian's injuries? Select one.

Yes, because the driver was still on the clock and was operating a company vehicle when the accident occurred.
Yes, because employers are strictly liable for all torts committed by their employees during work hours.
No, because the driver was engaged in a frolic, which constituted a major deviation from the scope of his employment. (correct answer)
No, because the driver's conduct was negligent, and employers are only vicariously liable for their employees' intentional torts.

Explanation: The correct answer is C. Under the doctrine of respondeat superior, an employer is vicariously liable for torts committed by an employee within the scope of employment. A minor deviation from an assigned route for a personal purpose is considered a 'detour' and remains within the scope of employment. However, a major deviation, such as traveling ten miles in the opposite direction of the work-related destination for a purely personal purpose, is considered a 'frolic.' During a frolic, the employee is outside the scope of employment, and the employer is not vicariously liable. Here, the driver's trip was a frolic. A is incorrect because being on the clock and using a company vehicle are factors, but not dispositive if the employee has substantially abandoned the employer's business. B is incorrect because vicarious liability is not strict liability for all employee torts; it is limited to torts within the scope of employment. D is incorrect because employers can be liable for both negligent and intentional torts of their employees, provided the torts are committed within the scope of employment.

Question 9

A wealthy investor, wishing to remain anonymous, hired an agent to purchase a large parcel of commercial real estate. The investor instructed the agent not to disclose her existence or identity. The agent entered into a written contract with a landowner to purchase the property, signing the contract in the agent's own name. Before the closing date, the investor became insolvent and could not provide the funds. The landowner discovered the investor's identity and her role in the transaction.

Which of the following accurately describes the landowner's rights regarding the purchase contract? Select one.

The landowner can only sue the agent, as the investor's identity was not disclosed in the contract.
The landowner can only sue the investor, as she was the true principal in the transaction.
The landowner must elect to sue either the agent or the investor, but not both.
The landowner can obtain a judgment against both the agent and the investor, but is limited to one satisfaction. (correct answer)

Explanation: The correct answer is D. This scenario involves an undisclosed principal. When an agent acts on behalf of an undisclosed principal, both the agent and the principal are liable on the contract. The third party (landowner) can sue both. While some older cases required the third party to make an 'election' of whom to sue after discovering the principal's identity, the modern rule followed by the Restatement (Third) of Agency is that the third party may obtain a judgment against both, though they are entitled to only one satisfaction of that judgment. A and B are incorrect because both parties are liable. C is incorrect because it reflects the outdated 'election of remedies' rule that is no longer the majority view.

Question 10

Is the dealership likely liable for the finance manager's misrepresentation? Select one.

No, because the manager was acting entirely for his own benefit and not in furtherance of the dealership's business.
Yes, because the dealership placed the manager in a position that enabled him to commit the fraud. (correct answer)
No, because the customer should have been suspicious of a request for a separate cash payment.
Yes, but only if the dealership was negligent in hiring or supervising the finance manager.

Question 11

Is the apartment complex owner bound by the employment contract with the plumber? Select one.

No, because the management company lacked express authority to enter into employment contracts.
No, because hiring an employee for a one-year term is an extraordinary act requiring specific authorization.
Yes, because the authority to handle day-to-day operations created apparent authority to hire necessary personnel.
Yes, because the management company had actual implied authority to hire personnel necessary to carry out its duties. (correct answer)

Question 12

You are defending a corporation in a fraud lawsuit. The lawsuit alleges that one of your client's sales agents, while negotiating a long-term supply contract, knowingly made false statements about the product's capabilities to the plaintiff, a third-party purchaser. The contract negotiated by the agent contains a clause stating, 'This agreement represents the entire understanding between the parties, and the corporation is not bound by any representations made by its agents that are not contained herein.' The agent was fully authorized to negotiate and sign the contract on your client's behalf.

What is the likely effect of the agent's fraudulent statements on the corporation's liability? Select one.

The corporation is not liable for the fraud because the merger clause in the contract disclaims liability for the agent's representations.
The corporation is not liable for the fraud because intentional torts like fraud are outside the scope of a sales agent's employment.
The corporation is liable for the agent's fraud because the misrepresentations were made with apparent authority to induce the third party into the contract. (correct answer)
The corporation is liable only if it ratified the agent's fraudulent statements after learning of them.

Explanation: The correct answer is C. A principal is liable for an agent's misrepresentations if the agent was acting with apparent authority. A sales agent has apparent authority to describe the products they are selling. When they make fraudulent misrepresentations in that context, the principal is liable for the resulting harm. A is incorrect because general merger clauses or exculpatory clauses do not typically shield a principal from liability for its agent's fraud, although it might allow the principal to avoid the contract. The third party can still sue for the tort of fraud. B is incorrect because fraud committed by a sales agent to secure a sale is generally considered within the scope of employment, as it is motivated by a desire to serve the employer. D is incorrect because the principal's liability is direct, based on the agent's apparent authority to make representations; ratification is not required.

Question 13

A trucking company hired a long-haul driver as an employee. The company had a strict policy against drivers carrying unauthorized passengers. The driver, in violation of this policy, picked up a hitchhiker. To make up for lost time from the unauthorized stop, the driver began to speed. While speeding, he lost control of the truck and crashed, injuring the hitchhiker.

In a lawsuit by the hitchhiker against the trucking company, what is the company's best defense against liability? Select one.

The driver was not acting within the scope of his employment when he gave a ride to a hitchhiker.
The company is not liable because the hitchhiker was a trespasser on the truck. (correct answer)
The company is not liable because the driver violated a direct company policy.
The driver's speeding caused the injury, and speeding was not authorized by the company.

Explanation: The correct answer is B. While the driver was acting within the scope of employment in the general sense of driving the truck, the company's liability to the specific injured party is at issue. Because the driver had no authority (actual or apparent) to invite passengers, the hitchhiker is considered a trespasser with respect to the trucking company. A principal generally owes no duty of care to a trespasser injured by an employee's negligence, only a duty to refrain from willful or wanton misconduct. Therefore, the company has a strong defense based on the hitchhiker's status. A is incorrect because the driver was still operating the truck for the company's benefit; the act of driving was within the scope, even if the passenger was unauthorized. C and D are incorrect because violating a policy or committing a negligent act (like speeding) does not automatically remove the driver's conduct from the scope of employment.

Question 14

You are representing a hospital being sued for medical malpractice. The plaintiff was injured by the alleged negligence of an emergency room physician. The physician works exclusively at your client's hospital, wears a hospital-branded lab coat, and is scheduled for shifts by the hospital. However, the physician's contract with the hospital explicitly states that she is an independent contractor, responsible for her own taxes and malpractice insurance. The plaintiff signed a consent form upon admission that did not mention the physician's employment status.

What is the plaintiff's strongest theory for holding the hospital liable for the physician's negligence? Select one.

Agency by estoppel, because the hospital failed to inform the plaintiff that the physician was an independent contractor. (correct answer)
Respondeat superior, because the hospital's control over the physician's schedule made her a de facto employee.
Inherent agency power, because providing non-negligent medical care is a fundamental part of a hospital's business.
Ratification, because the hospital billed the plaintiff for the physician's services.

Explanation: The correct answer is A. This scenario tests the concept of apparent agency or agency by estoppel in the context of independent contractors. Even if a person is technically an independent contractor, a principal can be held liable for their negligence if the principal's manifestations lead a third party to reasonably believe the person is an employee or agent, and the third party relies on that belief. Here, the hospital held the physician out as its agent (exclusive work, branded coat, scheduling) and did not inform the plaintiff otherwise. The plaintiff's reliance on the hospital to provide care makes this a strong argument. This concept is often called apparent agency in this context. B is a plausible argument, but the contractual terms weigh against employee status; the 'holding out' to the patient is the more direct path to liability. C is an outdated and less-used doctrine. D is incorrect because billing for services does not ratify a tort.

Question 15

What is the likely effect of the agent's fraudulent statements on the corporation's liability? Select one.

The corporation is not liable for the fraud because the merger clause in the contract disclaims liability for the agent's representations.
The corporation is not liable for the fraud because intentional torts like fraud are outside the scope of a sales agent's employment.
The corporation is liable for the agent's fraud because the misrepresentations were made with apparent authority to induce the third party into the contract. (correct answer)
The corporation is liable only if it ratified the agent's fraudulent statements after learning of them.

Question 16

You are representing a client who owns a construction company. The client hired an independent contractor to perform blasting work at a new development site located in a residential area. The client carefully selected a licensed and insured contractor. The contractor, despite taking standard precautions, failed to account for unusual soil composition, and a blast sent debris flying, damaging a neighboring home. The homeowner has sued your client's company for the damages.

What is your client's most likely exposure to liability? Select one.

The client is not liable because the harm was caused by the negligence of an independent contractor.
The client is not liable because they exercised reasonable care in selecting the contractor.
The client is liable because blasting is an inherently dangerous activity for which liability cannot be delegated. (correct answer)
The client is liable under the doctrine of respondeat superior because the contractor was acting for the client's benefit.

Explanation: The correct answer is C. While a principal is generally not liable for the torts of an independent contractor, there is an exception for activities that are inherently dangerous. Blasting is a classic example of an inherently dangerous activity. For such activities, the principal's duty of care is non-delegable, meaning the principal remains liable for harm caused by the contractor's negligence. A is incorrect because it states the general rule without considering the exception for inherently dangerous activities. B is incorrect because exercising care in selecting the contractor does not absolve the principal of liability when the activity is inherently dangerous. D is incorrect because the doctrine of respondeat superior applies to employees, not independent contractors.

Question 17

An individual purported to be an agent for a well-known corporation and signed a contract with a supplier for a large quantity of raw materials. In fact, the individual had never been employed by the corporation and had no authority to act on its behalf. When the supplier sent an invoice, the corporation refused to pay, stating that it knew nothing about the transaction. The corporation did nothing to accept or use the materials, which were never delivered.

Is the corporation liable to the supplier on the contract? Select one.

Yes, under a theory of agency by estoppel, because the corporation has a duty to prevent such fraudulent conduct.
No, because the individual was an imposter who possessed neither actual nor apparent authority. (correct answer)
Yes, if the supplier reasonably believed the individual was an agent for the corporation.
No, unless the corporation is found to have negligently allowed the imposter to appear as its agent.

Explanation: This question tests your understanding of agency law, specifically the requirements for binding a principal to a contract made by someone claiming to be their agent. The key issue is whether the corporation can be held liable when someone with no connection to them fraudulently impersonates their agent. For a principal to be bound by an agent's actions, the agent must have either actual authority (expressly or impliedly granted by the principal) or apparent authority (where the principal's conduct reasonably leads third parties to believe the person has authority). Here, the individual had zero connection to the corporation—no employment, no authorization, and no relationship whatsoever. The corporation never manifested anything that could create apparent authority, and they took no actions to ratify or accept the contract. Answer B correctly identifies that without actual or apparent authority, there's no basis for corporate liability. The individual was simply an imposter with no legal connection to the corporation. Answer A is wrong because agency by estoppel requires the principal to have made some manifestation that misled the third party—the corporation did nothing here. Answer C incorrectly suggests the supplier's reasonable belief alone is sufficient, but apparent authority requires the principal's conduct to create that reasonable belief, not just the third party's subjective impression. Answer D is incorrect because there's no general duty for corporations to monitor for imposters, and negligence isn't the standard for apparent authority. Remember: apparent authority requires conduct by the principal that creates the appearance of authority. A third party's reasonable belief, standing alone, isn't enough without some manifestation from the principal.

Question 18

Is the shipping company vicariously liable for the pedestrian's injuries? Select one.

Yes, because the driver was still on the clock and was operating a company vehicle when the accident occurred.
Yes, because employers are strictly liable for all torts committed by their employees during work hours.
No, because the driver was engaged in a frolic, which constituted a major deviation from the scope of his employment. (correct answer)
No, because the driver's conduct was negligent, and employers are only vicariously liable for their employees' intentional torts.

Question 19

Which of the following accurately describes the landowner's rights regarding the purchase contract? Select one.

The landowner can only sue the agent, as the investor's identity was not disclosed in the contract.
The landowner can only sue the investor, as she was the true principal in the transaction.
The landowner must elect to sue either the agent or the investor, but not both.
The landowner can obtain a judgment against both the agent and the investor, but is limited to one satisfaction. (correct answer)

Question 20

A farm owner hired a crop-dusting company as an independent contractor to spray a field with pesticide. Due to a sudden and unforeseeable wind shear, the pesticide drifted onto a neighboring organic farm, contaminating its crops and rendering them unsalable. The crop-dusting company was not negligent in its application of the pesticide. The organic farmer sued the farm owner for the value of the lost crops.

Is the farm owner liable for the damage to the organic farm? Select one.

No, because the farm owner is not liable for the actions of an independent contractor.
No, because the harm was caused by an unforeseeable act of nature, not by any party's negligence.
Yes, because crop-dusting is an abnormally dangerous activity for which strict liability is imposed. (correct answer)
Yes, because the farm owner received the direct benefit of the crop-dusting activity.

Explanation: The correct answer is C. Crop-dusting is often treated as an abnormally dangerous (or ultrahazardous) activity. When a person engages in such an activity, they are held strictly liable for any harm that results, regardless of the level of care exercised. This liability extends to a landowner who hires an independent contractor to perform the activity. Therefore, the farm owner is strictly liable for the damage caused by the pesticide drift. A is incorrect because it states the general rule but misses the critical exception for abnormally dangerous activities. B is incorrect because foreseeability and lack of negligence are not defenses to strict liability. D is incorrect because receiving a benefit does not, by itself, create liability for the actions of an independent contractor.