Young Corp. hired Wilson as a sales representative for six months at a salary of $5,000 per month plus 6% of sales. Which of the following statements is correct?
a.The agreement between Young and Wilson formed an agency coupled with an interest.
b.The agreement between Young and Wilson is not enforceable unless it is in writing and signed by Wilson.
c.Wilson is obligated to act solely in Young's interest in matters concerning Young's business.
d.Young does not have the power to dismiss Wilson during the six-month period without cause.
Answer:C
Choice "C" is correct. An agent owes the principal a duty of loyalty, which includes the duty to act solely in the principal's interest in matters relating to the agency.
Choice "d" is incorrect. A principal has the power to terminate an agency relationship at any time, although the principal might be liable for damages if the termination is in breach of contract.
Choice "b" is incorrect. A contract for services need not be in writing unless it cannot be performed within one year. The service contract here is for six months.
Choice "a" is incorrect. An agency coupled with an interest arises only when the agent is given an interest in the subject matter of the agency. A sales commission is not a sufficient interest.
