Deck 30: Liability of Principals, Agents, and Independent Contractors

Question 1

Undisclosed self-dealing by an agent is not regarded as violation of the duty of loyalty.

Answer 1

False

Question 2

An agent is liable for the tortious conduct of the principal if he or she has knowledge of the principal's conduct.

Answer 2

False

Question 3

Dual agency occurs when an agent acts for two or more different principals in the same transaction.

Answer 3

True

Question 4

An agent does not violate his or her duty of loyalty by serving two parties with the same interest.

Question 5

The principal is liable for the tortious conduct of an agent who is acting within the scope of his or her authority.

Question 6

A principal has no course of action if an agent discloses his or her confidential information to a third party.

Question 7

A third-party offer to an agent must be conveyed to the principal.

Question 8

The agent is compulsorily liable for any intentional or innocent misrepresentation made by the principal in a transaction.

Question 9

Principals are liable for negligence caused by an agent during substantial frolic and detour.

Question 10

Dual agency is permitted if all parties to a transaction agree to it.

Question 11

Vicarious liability is liability with fault.

Question 12

Middlemen and finders are not considered dual agents.

Question 13

Agents can compete with the principal during the course of the agency if the principal agrees.

Question 14

The principal is not liable for an agent's negligence if the agent is on a dual-purpose mission.

Question 15

Battery committed by an agent in the principal's premises and during the scope of employment is considered an unintentional tort.

Question 16

The coming and going rule says that a principal is generally not liable for injuries caused by its agents and employees while they are on their way to or from work.

Question 17

If an agent competes with the principal without the principal's permission,the principal may recover profits made by the agent.

Question 18

Based on the doctrine of respondeat superior,principals are liable for the negligent conduct of agents acting within the scope of their employment.

Question 19

If an agent reveals confidential information of a principal to a third party,the principal's course of action is to obtain an injunction against the third party.

Question 20

The duty of loyalty is a fiduciary duty owned by an agent not to act adversely to the interests of the principal.

Question 21

Ratification of a contract is a situation in which a principal accepts an agent's unauthorized contract.

Question 22

In a fully disclosed agency,an agent is not liable on the contract if he or she guarantees that the principal will perform the contract.

Question 23

The work-related test puts liability on the employee if the intentional torn is committed within work-related time and space.

Question 24

Which of the following is a fiduciary duty owed by an agent not to act adversely to the interests of the principal?

A)duty of loyalty
B)duty of undertaking
C)duty of discharge
D)duty of resolution

Question 25

In a partially disclosed agency,the contracting third party transacts directly with the principal and does not know the identity of the agent.

Question 26

The party that employs an independent contractor is called an agent.

Question 27

Which of the following is true of an agent's undisclosed self-dealing?

A)It does not violate the duty of loyalty.
B)The principal cannot rescind purchases made.
C)The principal can ratify the purchase.
D)The principal must accept liability.

Question 28

An independent contractor cannot represent more than one principal at a time.

Question 29

Which of the following statements is true of an agent taking an opportunity?

A)An agent can legally take an opportunity that is entitled to the principal.
B)A third-party offer to an agent need not be conveyed to the principal.
C)An agent cannot appropriate an offer for himself or herself once the principal rejects it.
D)A principal is permitted to recover a usurped opportunity from an agent.

Question 30

A partially disclosed agency can be created by mistake.

Question 31

Harrison hires an agent to look for a three-bedroom house in Atlanta.Elaine,the agent,finds a three-bedroom house in Harrison's budget but buys it herself without informing Harrison.This is an instance of the agent's ________.

A)self-dealing
B)conflict of interest with the principal
C)competing with the principal
D)usurping an opportunity

Question 32

The principal is liable for all torts of independent contractors.

Question 33

If an agent exceeds his or her scope of authority,a principal is bound on the contract only if he or she ratifies the contract.

Question 34

Principals do not control the means by which independent contractors achieve results.

Question 35

In an undisclosed agency,the principal is solely liable on the contract with the third party.

Question 36

The agent is not liable on the contract in a fully disclosed agency.

Question 37

A fully disclosed agency results if a third party entering into a contract knows the actual identity of the principal.

Question 38

The principal is liable for the innocent misrepresentation made by an agent acting within the scope of employment.

Question 39

Undisclosed agencies are not lawful in the United States.

Question 40

Which of the following is a course of action for a principal if an agent is found competing with him or her?

A)The principal can recover damages from the agent if the competition continues after the agency has ended.
B)The principal can recover profits made by the agent.
C)The principal is given an option of buying the agent's competing venture.
D)The principal is not allowed to recover for lost sales due to the agent's competing venture.

Question 41

Under the ________ test,the principal is liable for any intentional torts committed by an agent during working hours on the principal's premises.

A)work-related
B)motivation
C)promotional
D)self-dealing

Question 42

Most jurisdictions hold the ________ liable for injuries caused on a dual-purpose mission.

A)principal
B)agent
C)principal and the agent
D)injured party

Question 43

If a casting agent works for two Hollywood actors,the agent is liable for ________.

A)dual agency
B)competing with the principal
C)usurping an opportunity
D)self-dealing

Question 44

Minksine Corporation employs Sandy as its marketing manager.Sandy is driving her automobile to attend a meeting with a client on behalf of her employer.On her way to the meeting,Sandy is involved in an automobile accident that is caused by her negligence.Several people are seriously injured in the accident.Which of the following is true of this case?

A)Sandy is solely liable for damages caused by the accident.
B)The injured people cannot recover damages from Sandy.
C)Minksine Corporation is liable for the injuries caused by Sandy.
D)The injured people can only claim medical reimbursement from Minksine Corporation.

Question 45

________ occurs where a principal is liable for an agent's tortious conduct because of the employment contract between the principal and agent,not because the principal was personally at fault.

A)Vicarious liability
B)Negligence
C)Liability with fault
D)Misrepresentation

Question 46

Fiona works for Open Heart Hospital and lives 10 miles away from her place of work.The hospital has provided her with a car to commute and also pays for its upkeep.If she accidentally injures a person while driving to work in the morning,which of the following would be true?

A)Open Heart Hospital is completely liable for the injury caused.
B)The injured person can sue Open Heart Hospital but can only recover reimbursement for his or her medical expenses due to the injury.
C)Both Fiona and Open Heart Hospital are liable to the injured person.
D)Only Fiona is liable for her negligence.

Question 47

Gem's principal asked her to pick up his dry-cleaning on her way to work.After she had picked up the dry-cleaning and while driving to work,Gem knocked over an old man crossing the street as she did not apply the brakes in time.Under the theory of ________,Gem's principal is liable to the injured man.

A)intentional tort
B)negligence
C)liability with fault
D)vicarious liability

Question 48

Which of the following is true of tort liability for principals and agents?

A)A principal is responsible for the tortious conduct of an agent irrespective of the scope of his or her authority.
B)An agent is fully liable for his or her tortious conduct while on duty for the principal.
C)An agent is liable for the principal's tortious conduct if he or she participates in it.
D)An agent and a principal cannot be held responsible for the same tort.

Question 49

Under the ________ test,if the agent committed an intentional tort to promote the principal's business,the principal is liable for any injury caused by the tort.

A)work-related
B)motivation
C)promotional
D)dual agency

Question 50

In which of the following cases is a motivation test used to establish the employee's motive?

A)An employee commits a tort to promote the principal's business,outside work premises.
B)An employee commits an intentional tort against another employee at work premises.
C)An employee commits an unintentional tort that helps promote the principal's business.
D)An employee assaults another employee due to personal reasons.

Question 51

An actor asks an agent to place an order for a couch on the agent's way back to work.This is an instance of ________.

A)dual-purpose mission
B)frolic and detour
C)coming and going
D)self-dealing

Question 52

________ is a rule that says an employer is liable for the tortious conduct of its employees or agents while they are acting within the scope of the employer's authority.

A)Ad infinitum
B)Respondeat superior
C)Acienter
D)Voir dire

Question 53

Which of the following is an instance of misuse of confidential information?

A)An agent gives the seller the principal's name and phone number in a fully disclosed transaction.
B)A principal gives the contact details of an agent to a third-party without the agent's knowledge.
C)An agent withholds critical information from the principal about the agency.
D)An agent divulges details of his past employer to his principal.

Question 54

________ is a situation in which an agent does something during the course of his or her employment to further his or her own interests rather than the principal's.

A)Coming and going
B)Frolic and detour
C)Self-dealing
D)Dual-purpose mission

Question 55

Dan asks his agent Jude to drop off some medicines at his mother's house.On his way back,Jude decides to have lunch at a diner two blocks away from his workplace.While walking back to work,he jaywalks at a green signal on the road,causing a motorcyclist to hit the kerb and injure himself while attempting to avoid hitting Jude.Under the concept of ________,Dan is liable for the injuries caused to the motorcyclist.

A)coming and going
B)intentional tort
C)frolic and detour
D)dual-purpose mission

Question 56

Which of the following is considered an intentional tort?

A)negligence
B)innocent misrepresentation
C)fraud
D)dual-purpose mission

Question 57

A dual-purpose mission is a situation that occurs when ________.

A)an agent works for two or more principals with conflicting interests
B)a principal requests an agent to run an errand when the agent is on his or her own personal business
C)an agent who works for more than two principals but has similar agency relationships with both
D)an agent competes with the principal in a business with interests similar to the principal's business,after their agency has ended

Question 58

What is vicarious liability?

A)non-liability
B)liability for multiple torts
C)liability without knowledge
D)liability without fault

Question 59

Which of the following is true of dual agency?

A)An undisclosed dual agent is allowed to retain compensations of the transaction provided he or she discontinues the dual agency.
B)Examples of dual agents are finders and middlemen.
C)Dual agency is permitted if all parties in the transaction agree to it.
D)Dual agency is permitted as long the interests of both principals are similar.

Question 60

According to the coming and going rule,what is the liability of the principal for injuries caused by its agents and employees while they are on their way to or from work?

A)complete liability
B)vicarious liability
C)limited liability
D)no liability

Question 61

A client hires a lawyer as an independent contractor to represent her in a civil lawsuit against a defendant to recover monetary damages.If the client authorizes the lawyer to settle a case within a certain dollar amount and the lawyer does so,which of the following would be true?

A)The agreement is invalid after the lawyer's contract with the principal terminates.
B)The agreement is void because independent contractors cannot enter into contracts.
C)The agreement is binding only when there is no financial settlement involved.
D)The settlement agreement is binding for the client.

Question 62

Which of the following is true of an independent contractor's liability?

A)The agent is liable for torts committed by an independent contractor.
B)The contractor is personally liable for all his or her torts.
C)The principal is liable for the independent contractor's torts.
D)Both the principal and the independent contractor are liable for the contractor's torts.

Question 63

Describe the operation of a fully disclosed agency.

Question 64

An employee motivated by jealousy injures a colleague who dated her boyfriend,on work premises and during work hours.Based on the ________ test,the principal is liable.

A)motivational
B)premise-based
C)work-related
D)promotional

Question 65

Jamie is a lawyer who runs her own law firm specializing in real estate law.Raymond,a real estate developer,hires Jamie to represent him in the purchase of land.Jamie is the ________.

A)principal
B)agent
C)third-party
D)independent contractor

Question 66

Does an agent competing with the principal breach his or her duty of loyalty? What is the course of action for the principal in such a case?

Question 67

Why can an agent not take an opportunity meant for the principal? When is an agent permitted to take such an opportunity? Give an illustration depicting an agent's violation of his or her duty of loyalty.

Question 68

Explain in brief the liability for an independent contractor's torts.

Question 69

In a fully-disclosed agency,the contract is between ________.

A)a principal and an agent
B)a principal and a third party
C)an agent and a third party
D)a principal,an agent,and a third party

Question 70

Which of the following is true of misrepresentation?

A)An intentional misrepresentation by an agent is not considered fraud or deceit.
B)The principal is not liable for an agent's intentional misrepresentation.
C)A third party cannot recover damages from the principal due to an agent's intentional misrepresentation.
D)The principal is liable for an agent's innocent misrepresentation.

Question 71

A ________ is a deceit in which an agent makes an untrue statement that he or she knows is not true.

A)partially disclosed agency
B)misrepresentation
C)respondeat superior
D)dual-purpose mission

Question 72

A car salesperson is employed to sell the principal's car,and the principal tells the agent that the car was repaired after it was involved in a major accident.If the agent intentionally tells the buyer that the car was never involved in an accident,the agent has committed the tort of ________.

A)substantial frolic and detour
B)intentional misrepresentation
C)self-dealing
D)competing with the principal

Question 73

Which of the following torts committed by an agent is the liability of the principal?

A)substantial frolic and detour
B)accidents caused by an agent on the way to work
C)accidents caused by an agent on the way from work
D)negligence

Question 74

Which of the following is true of a fully disclosed agency?

A)The third party does not know the identity of the principal.
B)The third party knows the name of the principal,but all transactions are done with the agent.
C)The contract is between the principal,agent,and the third party.
D)The principal is liable on the contract with a third party.

Question 75

Which of the following best describes a partially disclosed agency?

A)an agent with multiple principals who do not know each other's identities
B)a transaction in which the third party does not know the identity of the agent
C)a transaction in which the third party knows the agent,not the principal
D)an agent who discloses only the name of his or her principal in a transaction

Question 76

Explain in brief the occurrence of an undisclosed agency.What are the liabilities involved in such an agency?

Question 77

Which of the following is true of an undisclosed agency?

A)The third party has no knowledge of the agency.
B)The third party knows the agent,not the principal.
C)All transactions with the third party are made by the principal without involving the agent.
D)Transactions under such an agency are considered unlawful.

Question 78

On the advice of her colleague,Stacey hires Harold,a lawyer and an independent contractor,to represent her in a court case.While driving to the courthouse to represent Stacey at trial,Harold negligently causes an automobile accident in which a bystander,Mildred,is severely injured.Who is liable to Mildred?

A)Stacey
B)Harold
C)Stacey's colleague
D)the firm that represents Harold

Question 79

If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so,who among the following is liable on the contract?

A)the principal
B)the independent contractor
C)the third party
D)both the principal and independent contractor

Question 80

Gerard wants to get some land cleared in Texas.With the help of a consulting agency,he hires Carlos,an independent contractor.Carlos procures dynamite from a legitimate dealer,to be used in clearing the land.However,the explosion of dynamite causes cracks to appear in the outer walls of a nearby house.Who is liable to the owner of the damaged house?

A)Gerard
B)Carlos
C)both Gerard and Carlos
D)the consulting agency