Question 1

A(n)________ is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act.

Accepted Answer

The definition provided is describing the relationship of an agency.

Question 2

Which of the following is true of a principal-independent contractor relationship?

Accepted Answer

A principal-independent contractor relationship means that the contractor is not an employee, but rather a separate entity hired to perform certain services. In this relationship, the principal does not have direct control over the contractor's actions, but can authorize the contractor to act on their behalf. Therefore, the principal is bound by any authorized contracts entered into by the contractor on their behalf.

Question 3

What role does ReNowait Goodhouses perform?

Accepted Answer

ReNowait Goodhouses is likely an independent contractor, as they are not specified to represent anyone as an agent or principal and do not have the legal responsibilities of a trustee. As an independent contractor, they work independently for the benefit of their own business, rather than as an employee or representative of another business entity.

Question 4

Martin, who wants to sell a house he owns, authorizes his concierge, Wilhelm, to find a potential buyer, and finalize a deal above a stipulated price.Wilhelm contracts Chris, a real estate broker, and intends him to only find a potential buyer and send them over to Wilhelm for the sale.Martin then contracts ReNowait Goodhouses, a home improvement company to renovate the house.ReNowait completes their work and Martin pays them.Chris then searches for a suitable buyer and finds one in George.George buys the house and Chris is paid for his services.
-Who is the principal during the land sale transaction?

Accepted Answer

Martin is the owner of the house and authorized Wilhelm to find a buyer, therefore he is the principal during the land sale transaction. Wilhelm and Chris are agents, and ReNowait Goodhouses is a contractor hired by Martin for renovations. George is the buyer, but not the principal.

Question 5

What role does Chris perform?

Accepted Answer

Chris is an independent contractor because he is not an employee of the company and he is not under the direct control of the company.

Question 6

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale.In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services.
-Which of the following types of agency had Marlon and Nita entered into?

Accepted Answer

The scenario describes an express agency where Marlon explicitly authorizes Nita to act as his agent to sell his property at a minimum price and within a specific timeframe. The contract also includes the provision that Marlon cannot hire another broker until the contract expires.

Question 7

A(n)________ is a relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Accepted Answer

A principal-agent relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf. The employee is the agent, and the employer is the principal. The agent has the power to make decisions and take actions on behalf of the principal, as long as those actions fall within the scope of the agency relationship.

Question 8

Which of the following is true of an express agency?

Accepted Answer

An express agency is created through a formal agreement, where the principal explicitly confers authority on an agent to act on their behalf. The terms and conditions of the agency are clearly defined in the agreement, which could include having multiple agents if necessary.

Question 9

The agency of power of attorney is an example of a(n)________ agreement.

Accepted Answer

An express agency agreement is one in which the principal expressly authorizes the agent to act on their behalf. In the case of a power of attorney, the principal explicitly grants the agent the legal authority to make decisions and act on their behalf. The other options, such as agency by ratification or apparent agency, do not accurately describe the nature of a power of attorney agreement.

Question 10

If a person employs an architect to design the layout of his or her own home, it would constitute a(n)________ relationship.

Accepted Answer

The answer of If a person employs an architect to...

Question 11

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale.In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services.
-What kind of contract existed between Marlon and Nita?

Accepted Answer

The contract between Marlon and Nita is an exclusive agency contract. This is because Marlon authorized Nita to make the sale at or above a minimum price and gave her exclusive rights to sell the property within a specified period of time, meaning that Marlon cannot hire another broker to sell the same property during the exclusive agency contract period.

Question 12

Which of the following is true of a general power of attorney?

Accepted Answer

A general power of attorney allows the agent to act on the principal's behalf to sign legal documents and make financial decisions. It can be created in writing and does not require a lawyer. It can also be used even after the principal becomes incapacitated, unless it specifies otherwise. However, it cannot be oral, as most jurisdictions require it to be in writing and signed by the principal.

Question 13

Which of the following types of relationship exists when a person hires another person to perform some form of physical service but does not authorize that person to enter into contracts on behalf his or her behalf?

Accepted Answer

In an employer-employee relationship, the employer hires the employee to perform physical services for them. However, the employee does not have the authority to enter into contracts on behalf of the employer. This relationship does not involve the use of an agent or a third party. Therefore, option A is the correct answer.

Question 14

Taylor gives a power of attorney to his twin brother Corey, permitting Corey to make all decisions on his behalf while he is abroad.As per the terms of the power of attorney, Corey is allowed make decisions to purchase or sell stocks on Taylor's behalf, sell Taylor's real estate if he deems it to be in Taylor's best interest, pursue or defend lawsuits on Taylor's behalf, and make all other relevant decisions for Taylor.What kind of power of attorney would confer such powers to Corey?

Accepted Answer

A general power of attorney confers broad powers to the agent to act on behalf of the principal in various matters, including financial and legal decisions, and is not limited to specific tasks or time periods. Therefore, Corey has the authority to make all decisions on Taylor's behalf while he is abroad, including the power to buy and sell stocks, sell real estate, and pursue or defend lawsuits.

Question 15

Which of the following is true of an employer-employee relationship?

Accepted Answer

An employer-employee relationship is based on the agreement between the two parties where the employee is hired to perform a specific task or service. The employee does not have implied power of attorney, authority to act on behalf of the principal or enter into contracts on behalf of the employer, unless specifically authorized to do so.

Question 16

What sort of commercial relationship exists between Martin and William have?

Accepted Answer

A principal-agent relationship exists when one party (the principal) authorizes another party (the agent) to act on their behalf in business transactions.

Question 17

Martin, who wants to sell a house he owns, authorizes his concierge, Wilhelm, to find a potential buyer, and finalize a deal above a stipulated price.Wilhelm contracts Chris, a real estate broker, and intends him to only find a potential buyer and send them over to Wilhelm for the sale.Martin then contracts ReNowait Goodhouses, a home improvement company to renovate the house.ReNowait completes their work and Martin pays them.Chris then searches for a suitable buyer and finds one in George.George buys the house and Chris is paid for his services.
-Who performs the role of the agent in this land sale transaction?

Accepted Answer

Wilhelm performs the role of the agent in this transaction as he was authorized by Martin to find a potential buyer and finalize the deal.

Question 18

An agency that occurs when a principal and an agent categorically agree to enter into an agency agreement with each other is known as a(n)________.

Accepted Answer

An express agency is one in which a principal and an agent categorically agree to enter into an agency agreement with each other. This agreement can be oral or written, but it must be clear and explicit in its terms. The other options (A, B, and C) refer to types of agency relationships that can arise in other ways.

Question 19

Which of the following constitutes an agency?

Accepted Answer

An agency is a legal relationship in which one party (the agent) acts on behalf of another party (the principal). Therefore, a principal-agent relationship constitutes an agency. The other options do not meet the definition of an agency.

Question 20

A(n)________ is a contract a principal and agent enter into that says the principal cannot employ another agent other than the one stated.

Accepted Answer

An exclusive agency contract is a type of agency agreement where the principal agrees to employ only one agent for a specific task or transaction. This means that the principal cannot appoint or employ another agent for the same task or transaction.

Quiz 29: Agency Formation and Termination

A(n) ________ is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act.

Which of the following is true of a principal-independent contractor relationship?

What role does ReNowait Goodhouses perform?

What role does Chris perform?

A(n) ________ is a relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Which of the following is true of an express agency?

The agency of power of attorney is an example of a(n) ________ agreement.

If a person employs an architect to design the layout of his or her own home, it would constitute a(n) ________ relationship.

Which of the following is true of a general power of attorney?

Which of the following types of relationship exists when a person hires another person to perform some form of physical service but does not authorize that person to enter into contracts on behalf his or her behalf?

Which of the following is true of an employer-employee relationship?

What sort of commercial relationship exists between Martin and William have?

An agency that occurs when a principal and an agent categorically agree to enter into an agency agreement with each other is known as a(n) ________.

Which of the following constitutes an agency?

A(n) ________ is a contract a principal and agent enter into that says the principal cannot employ another agent other than the one stated.