Deck 25: Principal-Agent, Employer-Employee, and Third-Party Relationships

Question 1

A principal may ask an agent to assume equal liability on a contract.

Answer 1

True

Question 2

The principal usually lists in writing all of the agent's duties.

Answer 2

False

Question 3

An agent is liable if he or she acts for an undisclosed principal.

Answer 3

True

Question 4

A principal who ratifies an unauthorized contract is bound by its terms.

Question 5

An agent is never liable on contracts entered into for the principal.

Question 6

Even if he or she neglects to sign the principal's name on a contract, an agent is not liable on the contract.

Question 7

The authority that an agent has because the principal leads third parties to believe that the agent has it is called

A) implied authority.
B) customary authority.
C) apparent authority.
D) none of these.

Question 8

An agent is liable on a contract if the agent signs the principal's name.

Question 9

A principal is liable only for acts the agent is authorized to perform.

Question 10

Express authority must be in writing to be effective.

Question 11

If an agent has apparent authority, any contracts made are

A) binding on the principal.
B) voidable by the principal.
C) understood as necessary to carry out the purposes of the agency.
D) none of these.

Question 12

A principal is not generally liable for an agent's crimes.

Question 13

A principal is liable for all torts committed by an agent.

Question 14

An agent's scope of authority generally includes

A) implied authority.
B) apparent authority.
C) express authority.
D) all of these.

Question 15

A power of attorney is an example of

A) incidental authority.
B) implied authority.
C) statutory authority.
D) express authority.

Question 16

An agent's implied authority is set out in the agency agreement.

Question 17

A person who pretends to be an agent is not liable on any contract.

Question 18

If a principal authorizes an agent to buy a tractor for $10,000, this is an example of

A) certain authority.
B) express authority.
C) incidental authority.
D) apparent authority

Question 19

An agent has implied authority to perform any act necessary to carry out the principal's business.

Question 20

A power of attorney is an example of express authority.

Question 21

A power of attorney is an example of ____________________ authority.

Question 22

Crenner, an agent of Alden, injured Bliss through her negligence. If Bliss obtains a judgment against Crenner,

A) Crenner can recover from Alden.
B) Crenner cannot recover from Alden.
C) Crenner can recover from Alden only if it was proved that Alden was negligent.
D) none of these.

Question 23

If an agent enters into a contract without authority to do so, the ____________________ is not liable on the contract.

Question 24

The extent of the agent's duties while carrying out the principal's business is the ____________________.

Question 25

A principal whose identity is fully revealed to all parties is a(n)

A) undisclosed principal.
B) partially disclosed principal.
C) disclosed principal.
D) none of these.

Question 26

If a third party learns the identity of an undisclosed principal the

A) contract is void.
B) third party may hold the agent liable.
C) third party may hold the principal liable.
D) third party may hold either the agent or the principal liable.

Question 27

Lawrence asked Foote to sell a diamond that Lawrence owned. Foote signed a contract with Bell to sell the diamond, but when Bell learned that Lawrence was the principal, she refused to go ahead with the contract. Lawrence can sue

A) Foote for breach of contract.
B) Bell for breach of contract.
C) Foote and Bell for conversion.
D) neither Foote nor Bell.

Question 28

If a principal tells an agent to falsify income tax returns,

A) the principal cannot be held liable.
B) the agent can be held liable if he or she carries out the principal's orders.
C) both principal and agent can be held liable.
D) none of these.

Question 29

____________________ refers to the extent of the agent's authority to carry out the principal's business.

Question 30

A principal may be held liable to third parties for torts committed by an agent if the

A) agent is a gratuitous agent.
B) third party notifies the principal.
C) third party notifies the agent.
D) agent acts within the scope of the agent's authority.

Question 31

An agent's authority to act in an emergency is a type of

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

Question 32

Crenner, an agent of Alden, injured Bliss through her negligence. Bliss may sue

A) Crenner.
B) Alden.
C) both Crenner and Alden.
D) neither Crenner nor Alden.

Question 33

A person who pretends to be an agent

A) is personally liable to a third party.
B) binds the principal.
C) binds the third party.
D) has the power of ratification.

Question 34

Boyd, an agent of Lowell, made a contract with Brink and signed the contract "S. Lowell (principal) by
A) Boyd, agent." If Boyd breaches the contract, Brink can sue

A) only Lowell.
B) only Boyd.
C) both Boyd and Lowell.
D) neither Boyd nor Lowell.

Question 35

An agent hired to sell a house has ____________________ authority to advertise the sale.

Question 36

If an agent commits a tort while acting within the scope of the agency, the party who is liable is

A) the agent alone.
B) the principal alone.
C) both the principal and the agent.
D) neither the principal nor the agent.

Question 37

If an agent commits a crime of which the principal is unaware,

A) the principal can be held liable.
B) the agent can be held liable.
C) both the agent and the principal can be held liable.
D) none of these.

Question 38

Blair, an agent of Curtis, smashed the windows of Arlen's car on purpose.

A) Only Blair is liable to Arlen.
B) Only Curtis is liable to Arlen.
C) Both Blair and Curtis are liable to Arlen.
D) Neither Blair nor Curtis is liable.

Question 39

An agent may be personally liable to third parties on a contract if

A) the agent assumes liability.
B) the agent signs a negotiable instrument in his or her own name and issued by the third party on the instrument.
C) the agent acts for an undisclosed principal.
D) all of these.

Question 40

Uhlen told Bixby that he had been appointed by Green to sell Green's car, and Bixby agreed to buy it. Uhlen was in fact not Green's agent. If Green refuses to sell the car to Bixby, Bixby can sue

A) Uhlen for breach of contract.
B) Green for breach of contract.
C) both Uhlen and Green.
D) neither Uhlen nor Green.

Question 41

If the agent does not tell third parties that he or she is an agent, the principal is said to be ____________________.

Question 42

If an agent intentionally commits assault and battery, only the ____________________ is liable.

Question 43

Russ, a salesperson in a clothing store, got into an argument with a customer. He struck and injured the customer, who required hospital treatment. Is the owner of the clothing store liable for the customer's injuries?

Question 44

A principal is not liable for ____________________ committed by an agent.

Question 45

Ruth, an agent, was asked by her principal to also sign a contract involving the sale of merchandise to Flower. If the contract is breached, may Flower sue both Ruth and her principal for damages?

Question 46

A principal is liable to third parties for ____________________ committed by the agent while acting within the scope of the agency.

Question 47

Without authority, Moss falsely represented himself as Buck's agent and contracted to buy goods from Early. Buck refused to accept them. Could Early hold Buck liable?

Question 48

Rice hired Carter, a real estate broker, to buy a certain piece of land from King for $25,000. Carter signed a contract agreeing to pay King $30,000. When Rice heard, she refused to go through with the contract. What action can King take?

Question 49

Blair hired Towner to sell Blair's car at auction. On the way to the auction, Towner hit a pedestrian, Green, at an intersection. Can Green recover from Blair?

Question 50

If an agent neglects to include the principal's name on a contract, only the ____________________ is bound by the contract.