Agency Relationships Practice Test

Clarett, who owned a retail business, left a note on a desk Clarett thought was occupied by Franklen. The note stated, "Please contract to purchase 20,000 widgets at the best possible price from Eisen Corp. for delivery in March." The desk was actually being used by Saranz, who made a contract for the purchase of the widgets as specified. Saranz had little negotiating experience and contracted for a high price. Which of the following statements is correct regarding the authority held by Saranz?

Tim’s Real Estate, Inc., employs David to buy city property for a future apartment complex. Through Construction Co., David’s own corporation, David secretly purchases a city property that David discovered while searching for property for Tim. David later arranges to have Construction Co. sell the property to Tim for more than Construction Co. paid for it. David has breached the duty of: