Deck 14: Agency Relationships

Question 1

The greater the employer's control over the work,the more likely it is that the worker is an employee.

Answer 1

True

Question 2

Agency relationships come about by voluntary consent and agreement of the parties-consideration is required,and the agreement must be in writing.

Answer 2

False

Question 3

An agency relationship can arise by ratification,which involves a determination of intent expressed by words or conduct.

Answer 3

True

Question 4

Under the principles of agency law,any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store.

Question 5

A person who cannot legally enter into a certain contract directly can do so indirectly through an agent.

Question 6

In an agency relationship,one party called the principal agrees to represent or act for another called the agent.

Question 7

Using an agent provides benefits to a principal,but can also result in liability imposed on the principal.

Question 8

Agency relationships cannot exist outside an employment,so agency law has a narrower reach than employment law.

Question 9

In some situations,the courts find an agency relationship where there is no formal agreement.

Question 10

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts.

Question 11

Any person can be an agent,regardless of whether he or she has the capacity to contract.

Question 12

An independent contractor is,by definition,an employee because the person's physical conduct is controlled,or subject to control,by the employer.

Question 13

A truck driver who drives a company truck on a regular basis is most likely an employee.

Question 14

By using agents,a principal can conduct multiple business operations simultaneously in various locations.

Question 15

An agency relationship is based on the attributes of power,control,and financial self-interest-not the trust and confidence of a fiduciary relationship.

Question 16

If an agent has represented himself or herself as possessing special skills,the agent is expected to use them.

Question 17

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

Question 18

When an agent's acts create the appearance of an agency that does not in fact exist,the principal is estopped to deny the agency relationship.

Question 19

A gratuitous agent can be liable to a principal for breach of contract,even in the absence of a contract,but not liable for the negligent performance of the deal.

Question 20

A property owner who hires a realtor to sell the property thereby enters into an agency relationship with an employee for a limited time.

Question 21

The equal dignity rule requires that a principal and an agent act in good faith and with mutual respect in their dealings with each other.

Question 22

An agent must keep confidential any information acquired through an agency during the term of the relationship,but can disclose it after the agency ends.

Question 23

The agent must maintain separate accounts for the principal's funds and for the agent's personal funds,but may intermingle these accounts.

Question 24

The principal is bound by the agent's unauthorized act,unless the principal negates it.

Question 25

When an agent,acting within the scope of his or her authority,contracts with a third party,a disclosed principal is liable to the third party.

Question 26

Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act.

Question 27

Nora works at Oil & Gas Inc.She is a sales representative who works with Oil & Gas customers.The company closely supervises its sales reps,and dictates their schedules.With respect to third parties,Nora is

A) an independent contractor.
B) an employee only.
C) an employee and agent.
D) a principal.

Question 28

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

Question 29

When an agent,acting within the scope of his or her authority,contracts with a third party,in no circumstance is the agent liable to the third party.

Question 30

The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent.

Question 31

Orin works at Pumps Inc.He works in the company's engineering department,interacting with third parties only to discuss technical issues.With respect to third parties,Orin is

A) an independent contractor.
B) an employee only.
C) an employee and agent.
D) a principal.

Question 32

Diamonds & Gold LLC hires Elle to buy gems and precious metals from various sources on its behalf.In this relationship,Diamonds is

A) an employee.
B) an independent contractor.
C) a principal.
D) an agent.

Question 33

Motor Parts Sales Inc.hires Nolly to work on its shipping dock,accepting deliveries,and dispatching trucks,and dealing with customers and drivers.With respect to Motor Parts,Nolly is most likely

A) an agent.
B) an agent and a principal.
C) a principal.
D) none of the choices.

Question 34

Both parties to an agency relationship have the power and the right to terminate the relationship at any time.

Question 35

An undisclosed principal is one whose identity is totally unknown by an agent and a third party at the time a contract is made.

Question 36

Once the agency relationship between a principal and an agent has ended,the agent loses the right to bind the principal.

Question 37

A principal may be liable for an agent's or an employee's tort,with the exception of negligence,which is an unintentional tort for which the agent or employee is vicariously liable.

Question 38

Ray is a delivery driver for Sicilian Pasta Company.Ray does exactly what the company tells him.Ray is

A) an employee.
B) an employer.
C) an independent contractor.
D) a principal.

Question 39

Actual authority in an agency relationship arises from what a principal makes clear to a third party.

Question 40

A principal has a duty to pay an agent in a timely manner the customary compensation for services rendered.

Question 41

Watercraft Inc.employs Vern as a sales agent for a trial period.At the end of the period,Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made.Vern may demand

A) a constructive trust.
B) an accounting.
C) nothing.
D) specific performance.

Question 42

Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects.Fred secretly buys some of the property and sells it to Energy at a profit.Fred has breached

A) the duty of performance.
B) the duty of loyalty.
C) no duty.
D) the duty of notification.

Question 43

Emmett,an agent for Fridley,signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax.The government prosecutes Fridley for failing to pay the tax.He is

A) liable,because notice to Emmett is notice to Fridley.
B) liable,because notice to Glover is notice to Fridley.
C) not liable,because Emmett did not notify Fridley of the tax.
D) not liable,because Glover did not tell Fridley about the tax.

Question 44

Denny,a certified public accountant and an investor,and Ethel,an insurance salesperson and a realtor,may create an agency relationship for

A) a business purpose only.
B) any legal purpose.
C) any purpose.
D) no purpose.

Question 45

Curly Fries Inc.grants its agent Dian an exclusive territory in which to sell its products.The company cannot compete with Dian in that territory under the duty of

A) none of the choices.
B) cooperation.
C) indemnification.
D) reimbursement.

Question 46

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm.Jon makes a deal with Lila for the sheep,but neither Jon nor Kino pays the price.Lila sues Jon for breach.Jon's right to hold Kino liable for any damages is the right to

A) none of the choices.
B) compensation.
C) indemnification.
D) reimbursement.

Question 47

Lev,an agent for Mill Grains LLC,executes an unauthorized contract with National Grocers Inc.The deal is highly advantageous to Mill Grains,and the company ratifies the contract.The contract is

A) valid.
B) vicarious.
C) void.
D) voidable.

Question 48

Suva is an agent for Tax Accountants,Inc.On the firm's behalf and at its request,Suva pays Uzo for specially coded software.Suva's right to obtain the amount of the payment from Tax Accountants arises under the duty of

A) none of the choices.
B) compensation.
C) indemnification.
D) reimbursement.

Question 49

Rosa introduces Sal to her friend Trey as "my associate." Sal purports to act as Rosa's agent in a business transaction with Trey.If Rosa is liable for Sal's actions,it will be because their relationship is

A) an agency by agreement.
B) an agency by estoppel.
C) an agency by operation of law.
D) not an agency relationship.

Question 50

Bern,a salesperson at a Carpet & Tile store,tells Dan,a customer,"Buy your flooring here,and I'll install it for less than the store would charge." Dan buys carpeting,which Bern installs for half the store's price.Bern keeps the money.With respect to the store,Bern has breached

A) no duty.
B) the duty of loyalty.
C) the duty of performance.
D) the duty of obedience.

Question 51

Larry is an agent for Mary.She gives him clear instructions to enter into contracts on her behalf only on Mondays,Wednesdays,or Fridays.He enters into a contract on her behalf on Tuesday.Larry has breached

A) no duty.
B) the duty of loyalty.
C) the duty of performance.
D) the duty of obedience.

Question 52

Darla serves in a representative capacity for Ellen's Botanicals.To accomplish the objectives of this relationship,Darla's authority can be implied by

A) by contradiction.
B) by custom.
C) by any subjective measure.
D) none of the choices.

Question 53

Romero employs Supply Procurement Service as an agent under a written agreement that describes the rights and duties of both parties.This is

A) apparent authority.
B) equal authority.
C) express authority.
D) implied authority.

Question 54

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn.Jess orally agrees to do so.This is an agency by

A) agreement.
B) estoppel.
C) operation of law.
D) none of the choices.

Question 55

Bread Company hires Craig to sell the company's products in a certain area.Bread agrees to pay Craig a salary,plus commission,for a trial period.They also agree that he can sell using any methods and during any hours that seem appropriate.The key factor in whether Craig is Bread's employee is

A) the amount of the salary.
B) the degree of the employer's control over the details of the work.
C) the length of the trial period.
D) the size of the sales area.

Question 56

Lucy is married to Marco.Lucy buys food for their children's lunches and charges the cost to Marco's account.This is an agency by

A) agreement.
B) estoppel.
C) operation of law.
D) none of the choices.

Question 57

Kit hires Lanie to manage Kit's Cattle Ranch.Lanie agrees to act on Kit's behalf,subject to Kit's control,and Kit trusts Lanie to so act.Their relationship is

A) an employee and an agent.
B) none of the choices.
C) an employer and an independent contractor.
D) a principal and an agent.

Question 58

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites,as well as to the hosts of banquets and other events.In this capacity,Rosario is

A) an agent.
B) an employee.
C) an independent contractor.
D) a principal.

Question 59

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

A) apparent authority.
B) express authority.
C) implied authority.
D) no authority.

Question 60

Ben manages a warehouse and its inventory for Coffee Roaster Inc.To operate this part of the business,Ben's authority can be inferred

A) from the position Ben occupies.
B) by a reasonable party with whom Coffee Roaster does business.
C) to contradict Ben's express authority.
D) under no circumstances.

Question 61

Ira serves in a representative capacity for Jett.Key is injured through Ira's negligence.Jett may be liable to Key if Ira's conduct occurred

A) due to a propensity Jett was not and could not have been aware of.
B) during normal working hours.
C) in the course and scope of Ira's employment.
D) outside the parties' employment relationship.

Question 62

Vera is a purchasing agent for Wild-Caught Fish Inc. ,with the authority to buy a sea fisher's catch up to a certain quantity.After the fish is bought,the agency relationship terminates

A) automatically.
B) following notice to all fishers within a reasonable geographic area.
C) following notice to all fishers with whom Vera did business.
D) following published notice.

Question 63

Gary drives a truck as an employee for Hauling Inc.Gary would most likely be considered acting outside the scope of her employment if he

A) crashed into a car at the airport while off duty.
B) hit a pedestrian in a parking lot during a "working" lunch.
C) ran over an attendant at a gas station while refueling the truck.
D) smashed into a store-front while intoxicated on-duty.

Question 64

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

A) any transaction causing a loss to Miklos.
B) Miklos's death or incapacity.
C) Miklos's sixty-fifth birthday.
D) Nathalie's handling of one of each stipulated transaction.

Question 65

Roman is the chief executive officer of Salty Snax Corporation.Roman's responsibilities include decisions on product development,marketing,and other significant business directions.Roman is subject to the approval and oversight of Salty Snax's board of directors.Teri is a Salty Snax manager whose duties include the firm's day-to-day hiring,firing,purchasing,and selling.Umberto is a Salty Snax salesperson,whose daily activities are controlled by Teri.Velma writes sales manuals and promotional materials for Salty Snax's products according to Roman's instructions and subject to Salty Snax's control,but has no dealings with the company's customers or suppliers.Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax's control.Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?

Question 66

Fara hires Gil,a real estate broker,to act as her agent to sell her land for $150,000.Before the land is sold at the stated price,oil is discovered beneath it,causing its market value to increase considerably.The agreement between Fara and Gil is likely

A) continued with a proportionate increase in Gil's sales commission.
B) continued until Gil tells prospective buyers of the discovery.
C) terminated by act of the parties.
D) terminated by operation of law.

Question 67

Bey indicates that he is acting as an agent on behalf of an unidentified client-Cuisine LLC-when he enters into a contract with Diners Bistro.Cuisine is

A) a disclosed principal.
B) an apparent agent.
C) an undisclosed principal.
D) a partially disclosed principal.

Question 68

Erin indicates that she is acting as an agent on behalf of an unidentified client-Flight Services Inc.-when she enters into a contract with Go Airlines.Liability to Go for nonperformance of the contract may be imposed on

A) none of the choices.
B) Erin and Flight Services.
C) Erin only.
D) Flight Services only.

Question 69

Luis hires Mieko to act as his agent to buy Ngoc's Southeast Asian Café.Luis tells Mieko to reveal only that she is buying the restaurant on behalf of a third party,without telling Ngoc's seller who that third party is.Luis is

A) a disclosed principal.
B) not a principal.
C) an undisclosed principal.
D) a partially disclosed principal.

Question 70

Yoshi contracts with Zach to buy a certain pub,Aficionado's,for Yoshi,who asks Zach not to reveal her identity.Zach makes a deal with Burcet,the owner of the pub,and makes a down payment.Yoshi fails to pay the rest of the price,and does not pay Zach for his services.Does Zach have any recourse against Yoshi? If so,on what basis and to what extent?

Question 71

Clark hires Dell,a real estate broker,to sell his beach house.The house is destroyed in a storm before it can be sold.Dell is Clark's agent

A) until Clark's insurer pays Dell's commission.
B) until the destroyed house is sold.
C) until the destroyed house is rebuilt and sold.
D) no more.

Question 72

Without authorization,Lars contracts on behalf of Mina to have Nemo paint Mina's Boutique.If Mina decides to ratify the contract,she must affirm

A) all of the contract.
B) any part of the contract,with Lars liable to Nemo for the difference.
C) any part of the contract before performance begins.
D) any part of the contract at any time.