When the Parties Do Not Agree on the Duration of the Agency

question 10

Multiple Choice

When the parties do not agree on the duration of the agency and the agent has incurred substantial expenses in completing the agency, a court will likely hold that:

• A) the agency relationship must be terminated immediately to avoid unjust enrichment.
• B) the principal cannot terminate the agency until after the agent has had a reasonable time to try to earn the expected commission.
• C) only the principal can terminate the agency and the courts cannot hold the agent liable for any expenses incurred by the agent during the agency period.
• D) the principal will be required to indemnify the agent if some fault of the agent causes a loss.

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Definitions:

Partnership

A bona fide business arrangement that includes two or more individuals managing together and sharing earnings.

Joint Venture

A joint undertaking by two or more persons or business entities to combine their efforts or their property for a single transaction or project, or for a related series of transactions or projects. A joint venture is generally treated like a partnership for tax and other legal purposes.

Co-Venturers

Parties that collaborate on a specific business venture, sharing profits, losses, and control.

Dissociates

Refers to the separation or detachment of something from something else, often used in chemistry to describe how molecules split into smaller parts or ions.