13. Sly was a general agent of the Cute Cosmetics Company with authority to sell, make collections, and adjust disputes.Sly was caught padding his monthly expense account by substantial amounts and was dismissed (fired).Cute hired another general agent, Ready, to replace Sly.Ready was slowly but steadily calling upon Sly\'s accounts to make sales and was informing them that Sly\'s services had been terminated.Cute also immediately published a notice in the appropriate trade journals and the local newspaper announcing the replacement of Sly with Ready.Sly, after he was let go called on all of his customers who had outstanding accounts payable and quickly made whatever collections he could in cash and absconded.Which of the following statements is correct regarding Cute\'s legal rights against the customers? Select one: a. Cute can regain possession of the goods from the customers that paid Sly since title did not pass because Sly\'s actions constituted a fraud. b. Cute can obtain payment from the customers despite Sly\'s wrongful acts since it had published effective notice of Sly\'s dismissal. c. Cute will have to absorb the loss unless Cute can prove the customer had actual notice of Sly\'s dismissal or can recover from Sly. d. Cute will have to absorb the loss because an agency once created cannot be terminated. Solution B) Cute can obtain payment from the customers despite sly \'s wrongful acts since it had published effective notice of Sly s, dismissal .

1. 13. Sly was a general agent of the Cute Cosmetics Company with authority to sell, make
collections, and adjust disputes.Sly was caught padding his monthly expense account by
substantial amounts and was dismissed (fired).Cute hired another general agent, Ready, to
replace Sly.Ready was slowly but steadily calling upon Sly's accounts to make sales and was
informing them that Sly's services had been terminated.Cute also immediately published a
notice in the appropriate trade journals and the local newspaper announcing the replacement of
Sly with Ready.Sly, after he was let go called on all of his customers who had outstanding
accounts payable and quickly made whatever collections he could in cash and absconded.Which
of the following statements is correct regarding Cute's legal rights against the customers?
Select one:
a. Cute can regain possession of the goods from the customers that paid Sly since title did not
pass because Sly's actions constituted a fraud.
b. Cute can obtain payment from the customers despite Sly's wrongful acts since it had
published effective notice of Sly's dismissal.
c. Cute will have to absorb the loss unless Cute can prove the customer had actual notice of Sly's
dismissal or can recover from Sly.
d. Cute will have to absorb the loss because an agency once created cannot be terminated.
Solution
B) Cute can obtain payment from the customers despite sly 's wrongful acts since it had
published effective notice of Sly s, dismissal