Deck 22: Agency Relationships

Question 1

A principal has a duty to cooperate with the agent.

Answer 1

True

Question 2

An agent must use reasonable diligence and skill in acting on be?half of his or her principal.

Answer 2

True

Question 3

An agent's authority must be implied for the agent's act to bind a principal.

Answer 3

False

Question 4

An employee may act in the capacity of an agent.

Question 5

An officer of a corporation cannot possess the power to bind the corporation.

Question 6

A principal owes his or her agent a duty to act in good faith.

Question 7

A principal must indemnify an agent for liability due to authorized acts by the agent.

Question 8

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Question 9

An agent whose employer does not have the right to control the agent's performance is an independent contractor.

Question 10

An agent must maintain separate accounts for the principal's funds and the agent's personal funds.

Question 11

A power of attorney can be given only by an actual attorney.

Question 12

An independent contractor always acts in the capacity of an agent.

Question 13

If a contract is in writing,the agent's authority to perform the same duty must be in writing.

Question 14

A principal may deny the existence of an agency relationship whenever it suits his or her purpose.

Question 15

A principal's liability in a contract with a third party may depend on the authority given to the agent to act on be?half of the principal.

Question 16

Generally,a principal has a duty to pay an agent for services rendered.

Question 17

An agency relationship is a fiduciary relationship.

Question 18

A minor can be an agent.

Question 19

A principal can ratify an agreement made without authorization on his or her behalf by one who is not his or her agent.

Question 20

An agent owes his or her principal a duty to act in good faith.

Question 21

A principal cannot be held liable for an agent's crime.

Question 22

Any party who uses an e-agent is bound by the e-agent's actions.

Question 23

Dahlia is a minor.Dahlia may be

A)an agent but not a principal.
B)an agent or a principal.
C)a principal but not an agent.
D)neither an agent nor a principal.

Question 24

Wrongful termination of an agency relationship can subject the cancel?ing party to a suit for damages.

Question 25

Fact Pattern 22-1
Roz and Sara work as clerks in Trina's Trendee Clothes Shop.Trina withholds fed?eral taxes from their pay,and controls the methods and details of the perform?ance of their work.Roz and Sara are not au?thorized to modify the prices or other terms of a sale at the shop.
Refer to Fact Pattern 22-1.Trina authorizes Roz to sell clothes at remote lo?cations at prices that Liz negotiates in those locations.With respect to sales at those locations,Roz is

A)an independent contractor.
B)not Trina's agent or employee,or an independent contractor.
C)Trina's agent and employee.
D)Trina's employee only.

Question 26

Fact Pattern 22-1
Roz and Sara work as clerks in Trina's Trendee Clothes Shop.Trina withholds fed?eral taxes from their pay,and controls the methods and details of the perform?ance of their work.Roz and Sara are not au?thorized to modify the prices or other terms of a sale at the shop.
Refer to Fact Pattern 22-1.At the shop,Roz and Sara are

A)independent contractors.
B)not Trina's agents or employees,or independent contractors.
C)Trina's agents and employees.
D)Trina's employees only.

Question 27

Even after an agency relationship has terminated,there are circum?stances under which a principal may be bound by his or her agent's act.

Question 28

If an agent acts within the scope of authority,an undis?closed principal is liable to a third party for contracts made by the agent.

Question 29

A principal is liable for any harm caused by his or her agent's tort.

Question 30

Apparent authority exists if a principal causes a third party reasonably to believe that an agent has authority to act.

Question 31

If an agent acts within the scope of authority,a disclosed prin?cipal is li?able to a third party for contracts made by the agent.

Question 32

Genetic Seed Company hires Howie to work in its shipping office,accepting deliveries and dealing with other companies' drivers.With respect to Genetic,Howie is most likely

A)an agent.
B)an independent contractor.
C)a principal.
D)a work for hire.

Question 33

Under the theory of respondeat superior,liability for the wrongful acts of employees within the scope of their employment is imposed on employers.

Question 34

If an agent acts within the scope of authority,a partially dis?closed prin?cipal is liable to a third party for contracts made by the agent.

Question 35

A principal may affirm the desirable parts of a contract and reject the undesirable parts of the contract.

Question 36

An agent's authority to act on behalf of a principal derives exclusively from the agent's express au?thor?ity.

Question 37

When the specific subject matter of agency is lost or destroyed,the agency terminates.

Question 38

Fact Pattern 22-1
Roz and Sara work as clerks in Trina's Trendee Clothes Shop.Trina withholds fed?eral taxes from their pay,and controls the methods and details of the perform?ance of their work.Roz and Sara are not au?thorized to modify the prices or other terms of a sale at the shop.
Refer to Fact Pattern 22-1.Trina hires Unlimited Cleaning Company to clean the carpets of her shop.Trina gives Unlimited instructions as to what needs to be cleaned and when.Unlimited is

A)an independent contractor.
B)not Trina's agent or employee,or an independent contractor.
C)Trina's agent and employee.
D)Trina's employee only.

Question 39

A principal must ratify a contract to be bound to it.

Question 40

When a principal places an agent in a position to defraud a third party,the principal is liable for the agent's fraudulent acts.

Question 41

Sedate Investment Corporation (SIC)hires Tiger,a real estate agent,to locate investment properties for SIC.Tiger learns of a warehouse avail?able for $100,000,buys it himself,and offers it to SIC for $110,000.Tiger

A)breached the duty of loyalty.
B)did nothing wrong.
C)should have made the offer to sell through a neutral third party to avoid any conflict of interest.
D)should have offered the property for sale to others to avoid the appearance of a conflict of interest.

Question 42

Elin,an agent for First Credit Corporation (FC),enters into an unau?thor?ized contract with Great Expectations,Inc.(GE),purportedly on FC's be?half.This contract will be enforceable if it is ratified by

A)any third party.
B)Elin.
C)FC.
D)GE.

Question 43

Sanitary Supplies Company requires its customers to pay by check.Tyla,a Sanitary driver,tells customers on her route that they can pay her with cash.When Sanitary learns of Tyla's collections,it takes no action to stop her.Tyla steals some of the cash.Sanitary may suffer the loss under the doc?trine of

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

Question 44

Jay holds himself out as possessing special accounting skills.As an agent,he must exercise the degree of skill or care expected of

A)a person having those skills.
B)an average,unskilled person.
C)a reasonable person.
D)the principal.

Question 45

Concession Sales,Inc. ,employs Darla as a sales agent.Concession gives Darla a furnished office and an expense account.Entertainment Stadium Corporation (ESC)orders supplies from Darla,who fills the order with goods from Food4U Company.The goods are defective.ESC may recover damages from Concession on the ground of

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

Question 46

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends.If Jill is liable for Kelly's actions,it will be under

A)the doctrine of estoppel.
B)the equal dignity rule.
C)the fiduciary principle.
D)the good faith statute.

Question 47

Bess,an agent for Calm Harbor Marina,Inc. ,enters into an unauthorized contract with Dropt Anchor Worx,Inc. ,purportedly on behalf of Calm Harbor,which refuses to perform.Bess is liable to

A)Calm Harbor and Dropt Anchor for breach of contract.
B)Calm Harbor for misrepresentation.
C)Dropt Anchor for misrepresentation.
D)no one.

Question 48

Cody contracts with Drew to act as her agent in a fraudulent marketing scheme.Cody does not successfully complete the scheme.Drew can re?cover from Cody for

A)breach of contract.
B)breach of implied warranty.
C)breach of the duty of performance.
D)none of the choices.

Question 49

Lauren may hire employees to work in the Main St.Computer Store that she manages de?spite the fact that her employment agreement with Main St.says noth?ing about her being able to hire employees.This is

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

Question 50

Gallopin' Galoshes Corporation and Hot2Trot Purchasing Company may create an agency agreement

A)by conduct,in writing,or orally.
B)by conduct or orally only.
C)in writing only.
D)under no circumstances.

Question 51

Sunny is a salesperson for Tech Instruments,Inc.(TI).She misrepresents to Universal Piping Company,a customer,that a certain device has a certain ca?pability.In reliance,Universal buys the device.Liable for this misrepresen?ta?tion is

A)Sunny and TI.
B)Sunny only.
C)TI only.
D)Universal but neither Sunny nor TI.

Question 52

Glenn is an agent for HiFlite,Inc.On HiFlite's behalf and at its request,Glenn pays Ilsa for certain plane maintenance and repair serv?ices.Glenn's right to obtain the amount of those payments from HiFlite arises under the principal's duty of

A)avoidance.
B)cooperation.
C)indemnification.
D)reimbursement.

Question 53

Igor,an agent for Jules,signs an agreement with Kali on Jules's behalf but ne?glects to tell Jules that the agreement requires the payment of a certain tax.The government prosecutes Jules for failing to pay the tax.Jules is

A)liable,because Igor's knowledge is imputed to Jules.
B)liable,because Kali's knowledge is imputed to Jules.
C)not liable,because Igor did not tell Jules about the tax.
D)not liable,because Kali did not tell Jules about the tax.

Question 54

Integrity Products,Inc. ,hires Josi to enter into a contract with Kym on Integrity's behalf.When Integrity breaches the contract,Kym sues Josi for damages.Josi's right to be compensated for costs incurred in defending against the suit is Integrity's duty of

A)avoidance.
B)cooperation.
C)indemnification.
D)reimbursement.

Question 55

Patsy is an agent for Refined Chemicals Corporation.Refined Chemicals owes Pam the duty of

A)accounting.
B)obedience.
C)performance.
D)safe working conditions.

Question 56

Elle is an agent for Fresh Organics Corporation.Elle makes a mis?representa?tion when entering into a contract on be?half of Fresh with Gala Grocery Stores,Inc.Gala

A)is estopped from performing the contract.
B)may rescind the contract.
C)must perform the contract.
D)must ratify the contract.

Question 57

Biz-E-B.com uses an electronic agent,or e-agent,to perform certain tasks in e-commerce.With respect to the e-agent's actions,Biz-E-B.com is bound by

A)all of the actions.
B)only those actions of which Biz-E-B.com is aware.
C)only those actions that Biz-E-B.com does not refute within ten days.
D)only those actions that Biz-E-B.com ratifies.

Question 58

Dolly is a businessperson acting as an agent for Energy Green,Inc.(EGI).In an ordinary business situation,Dolly

A)can contract on EGI's behalf without further authority or ratification.
B)cannot contract on EGI's behalf.
C)must obtain EGI's written authority to enter into a contract for it.
D)must obtain EGI's later ratification of a contract entered into for it.

Question 59

Clearwater Irrigation Services,Inc. ,employs Daphne as an agent.During the agency,Daphne acquires new skills.After the termination of the relationship,Daphne uses those skills in a new job.Daphne has breached

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

Question 60

Chaz hires Darin to act as her agent in the purchase of Erector Steel Corporation.Chaz does not want the seller to know that she is the buyer,so she asks Darin to represent that he is buying the firm for himself.Chaz is

A)a disclosed principal.
B)an independent contractor.
C)an undisclosed principal.
D)a partially disclosed principal.

Question 61

Common Carrier Corporation (CCC)employs Devin as an agent.Without CCC's knowledge but otherwise acting within the scope of em?ployment,Devin commits a crime.The state can successfully prosecute

A)CCC only.
B)CCC or Devin.
C)Devin only.
D)neither CCC nor Devin.

Question 62

Myra,an agent for Netherwear,Inc. ,has often done business with Owen on Netherwear's behalf.Myra and Netherwear terminate their agency.For Myra and Netherwear to avoid liability for later deals,Owen must be no?tified by

A)Myra only.
B)Netherwear only.
C)Myra and Netherwear.
D)neither Myra nor Netherwear.

Question 63

Fact Pattern 22-2
Qacy employs Royce as his authorized business agent on April 1.Qacy's son Stan peti?tions a court to declare Qacy mentally incompetent.The court grants Stan's request on May 1.
Refer to Fact Pattern 22-2.Royce enters into a contract on Qacy's be?half on May 15,before Royce knows of the court's action.The contract is

A)binding on Qacy.
B)binding on Roy.
C)binding on Stan.
D)void.

Question 64

Fact Pattern 22-2
Qacy employs Royce as his authorized business agent on April 1.Qacy's son Stan peti?tions a court to declare Qacy mentally incompetent.The court grants Stan's request on May 1.
Refer to Fact Pattern 22-2.Royce enters into a contract on Qacy's be?half on April 15.After May 1,the contract,which has not been performed,is

A)binding on Qacy.
B)binding on Royce.
C)binding on Stan.
D)void.

Question 65

Gil is a purchasing agent for H&H Ranch with the authority to buy cat?tle at a certain auction.After the cattle have been bought,the agency rela?tionship terminates

A)automatically.
B)following notice to all actual cattle sellers.
C)following notice to all potential cattle sellers.
D)following published notice in a local newspaper.

Question 66

Esmé hires Franz to do some remodeling work in her office.The relation?ship be?tween Esmé and Franz is client and independent contractor.While working,Franz drops a tool on Gregor,Esmé's customer,causing an injury.Esmé is

A)liable to Gregor because he was injured on Esmé's property.
B)liable to Gregor unless Franz's act is intentional.
C)not liable because Franz is an independent contractor.
D)not liable to Gregor because Franz is Esmé's employee.

Question 67

Mariah hires Nelly,a real estate broker,to sell her warehouse.The ware?house burns down be?fore being sold.Nelly is

A)Mariah's agent until Mariah's insurer pays Nelly's commission.
B)Mariah's agent until the burnt warehouse is sold.
C)Mariah's agent until the warehouse is rebuilt and sold.
D)no longer Mariah's agent.

Question 68

Ida hires Jim,a real estate broker,to act as her agent to sell her land for $100,000.Oil is discovered beneath the land,causing its market value to in?crease one hundred-fold.The agency agreement is likely

A)still in force if Ida gives Jim additional consideration.
B)still in force if Jim does not mention the oil to prospective customers.
C)terminated by mutual consent of the parties.
D)terminated by operation of law.

Question 69

LikNu Auto Sales,Inc. ,employs Miserly Collection Company as an agent.While repossessing a truck from Niki,one of LikNu's customers,Miserly intentionally injures her.Niki can recover from

A)LikNu only.
B)LikNu or Miserly.
C)Miserly only.
D)Niki's insurance company only.

Question 70

Pete's Pizza employs Quincy as a delivery driver.Pete's guarantees that an order will be delivered within thirty minutes or there is no charge,and insists that its drivers meet the limit.One night,while making a de?livery,Quincy is caught in a traffic jam.To deliver the pizza within the thirty-minute time limit,Quincy drives onto a sidewalk and hits Ruth,a pedes?trian.Is Pete's li?able to Ruth for her injuries? Is Quincy liable to Ruth? Why or why not?

Question 71

Ferbie contracts with Garth to buy a certain restaurant,Haus of Coffee,for Garth,who asks Ferbie not to reveal his identity.Ferbie makes a deal with Izzy,the owner of the restaurant,and makes a down payment.Garth fails to pay the rest of the price,and does not pay Ferbie for his services.Does Ferbie have any recourse against Garth? If so,on what basis and to what extent?

Question 72

Clu is an employee of Digger Ditch Services.Elmo is injured through Clu's negligence.Digger may be liable to Elmo if Clu's conduct occurred

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