Problem
A. Randolph signed a contract with Timber-Lane Corp., a wood products manufacturer, for a large order of custom wood furniture for a hotel being built by Howie Johnson, a hotelier. Under the terms of the agency, Randolph used his name, rather than Howie, and did not disclose that Randolph was Howie's agent. Randolph agreed to the contract with Timberlane and Howie Johnson disaffirms the contract and the agency. What is the legal impact upon Randolph as an agent with a partially disclosed or undisclosed principal? What is the legal impact upon Howie?
B. Explain the ways in which an agency relationship may arise between a master (principal) and a servant (agent). (review formation of agency)
C. Shamar is contracted to search for a piece of property to build a vacation lodge for Lisa and her husband. Shamar finds a really well priced parcel or land with a distressed seller. Shamar can acquire the land well below the maximum price she is authorized to contract for under her agency. She considers purchasing the land for her own account. Can she, pursuant to her agency, then sell this land to Lisa? (Review the duties of agents)
D. Discuss the significance of the difference between an employee and an independent contractor and why it is important in the study of agency law.
E. Review TASER INTERNATIONAL v. WARD, 224 Ariz. 389, 231 P.3d 921 (Ariz. App. Div. 1 2010) and review the duties of principals and agents. In this case, a high-level employee is charged with violating his agency when he resigned from the company and launched his own company selling a similar product (a clip on video camera). How might the agent in this case have launched his own company without violating his duty of loyalty?