Question 1

What type of principal is Bobby?

Accepted Answer

If the third party does not know that an agent is acting on behalf of a principal, we have an undisclosed principal.

Question 2

Which of the following is true regarding John's liability to Bobby?

Accepted Answer

If an agent makes a substantial departure from the course of the employer's business, the employer is not liable.

Question 3

If John pays for the damage to Joan's car,does he have any remedy against Manny?

Accepted Answer

If the third party is able to establish employee negligence such that the employer is liable, the employer has the right to recover from the employee any damages he paid the third party as a result of the employee's negligence. The right to recover damages is referred to as the right of indemnification.

Question 4

Which of the following is true regarding whether Greg has any right of recovery against Christy for his injured foot?

Accepted Answer

The principal/employer holds vicarious liability, which is liability assigned without fault, for any harm the agent/employee causes while working for the principal.

Question 5

Which of the following is not necessarily a means may an agency relationship be terminated?

Accepted Answer

An agency relationship can be terminated in a number of ways including fulfillment of purpose, occurrence of a specific event, revocation of authority, and renunciation by the agent. Insolvency, the inability to pay debts or the condition in which liabilities outweigh assets, does not necessarily result in the termination of the agency relationship.

Question 6

Which of the following is true regarding Christy's liability,if any,for her own conduct in regards to Frank's injury?

Accepted Answer

A principal may be liable for negligent hiring who fails to do a background check to learn about the tendencies of potential employees.

Question 7

How long does an agent's apparent authority continue once an agency relationship is terminated?

Accepted Answer

The agent's apparent authority continues until the principal notifies third parties that the relationship has ended.

Question 8

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship,he or she would want to have access to knowledge about which of the following?

Accepted Answer

A U.S. manager conducting business in the European Union needs access to the intricacies of Chapter IV of the Agency Relationship Law that focuses on termination.

Question 9

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Accepted Answer

If the agent has somehow breached the fiduciary duty to the principal, the principal can revoke the agent's authority without liability.

Question 10

Which of the following is false regarding termination of agency based on operation of law?

Accepted Answer

When a new law makes the commission of an existing agency agreement illegal, the agreement is terminated.

Question 11

Which of the following is true regarding whether Greg has any right of recovery against Susie for his injured foot?

Accepted Answer

A third party injured through the negligence of an employee can sue either the employee or the employer.

Question 12

Which of the following is true regarding whether Bobby is liable to Susie for the cost of the book if Susie pays Gwen the purchase price?

Accepted Answer

When the agent acts within her authority on behalf of an undisclosed principal, the law will likely hold her liable for the agreement. In the eyes of the third party, the agent is the only person who could be liable. Yet, if the agent is liable to the third party, then the undisclosed principal is liable to the agent.

Question 13

Which of the following is true regarding any liability John has to Sandy?

Accepted Answer

If the principal authorizes the agent to engage in an act and the agent misrepresents herself intentionally or unintentionally, the principal is always liable in tort to someone who relied on the agent's misrepresentation.

Question 14

Which of the following is an agency agreement created for the agent's benefit,not for the principal's?

Accepted Answer

An agency coupled with an interest is a special kind of agency relationship created for the agent's benefit, not the principal's.

Question 15

Which of the following is true regarding notice of termination of an agency relationship?

Accepted Answer

Depending on the circumstances, notice of termination can be actual or constructive.

Question 16

Which of the following is false regarding termination of agency in the Netherlands?

Accepted Answer

In the most interesting triggering event for mandatory compensation, the agent is entitled to "goodwill compensation" if (1) the agent brought the principal new customers, (2) the agent brought new agreements with clients who are still profitable to the principal, and (3) such payment is financially reasonable for the principal (the relationship is not being terminated due to bankruptcy).

Question 17

Which of the following is true regarding whether Susie is personally bound on the contract with Gwen?

Accepted Answer

When the agent acts within her authority on behalf of an undisclosed principal, the law will likely hold her liable for the agreement. In the eyes of the third party, the agent is the only person who could be liable.

Question 18

While making a delivery,Barry,a delivery driver for XYZ Company,went through the drive through at a local restaurant to get a cup of coffee and bumped into the car in front of him doing some damage to the car's bumper.Which of the following is true regarding the liability of XYZ Company for the damage to the car?

Accepted Answer

If an agent makes a substantial departure from the course of the employer's business, the employer is not liable.

Question 19

Which of the following is the most typical way in which to provide constructive notice of agency termination?

Accepted Answer

Constructive notice usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed.

Question 20

Which of the following refers to an employer's right,if any,to recover from an employee damages the employer paid a third party as a result of the employee's negligence?

Accepted Answer

If a third party is able to establish employee negligence such that the employer is liable, the employer has the right to recover from the employee any damages he paid the third party as a result of the employee's negligence. The right to recover damages is referred to as the right of indemnification.

Quiz 34: Liability to Third Parties and Termination

What type of principal is Bobby?

Which of the following is true regarding John's liability to Bobby?

If John pays for the damage to Joan's car,does he have any remedy against Manny?

Which of the following is true regarding whether Greg has any right of recovery against Christy for his injured foot?

Which of the following is not necessarily a means may an agency relationship be terminated?

Which of the following is true regarding Christy's liability,if any,for her own conduct in regards to Frank's injury?

How long does an agent's apparent authority continue once an agency relationship is terminated?

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship,he or she would want to have access to knowledge about which of the following?

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Which of the following is false regarding termination of agency based on operation of law?

Which of the following is true regarding whether Greg has any right of recovery against Susie for his injured foot?

Which of the following is true regarding whether Bobby is liable to Susie for the cost of the book if Susie pays Gwen the purchase price?

Which of the following is true regarding any liability John has to Sandy?

Which of the following is an agency agreement created for the agent's benefit,not for the principal's?

Which of the following is true regarding notice of termination of an agency relationship?

Which of the following is false regarding termination of agency in the Netherlands?

Which of the following is true regarding whether Susie is personally bound on the contract with Gwen?

Which of the following is the most typical way in which to provide constructive notice of agency termination?

Which of the following refers to an employer's right,if any,to recover from an employee damages the employer paid a third party as a result of the employee's negligence?