Deck 17: Management of Employee Conduct: Agency

Question 1

In a master/servant relationship, the principal is liable for the torts of the agent committed within the scope of employment.

Answer 1

True

Question 2

Agents are liable to principals for negligence in performing their duties.

Answer 2

True

Question 3

A real estate agent who fails to disclose his interest as a buyer to his seller principal has violated his duty of loyalty.

Answer 3

True

Question 4

A principal is not liable for an accident caused by its delivery person.

Question 5

There is no liability of employers for the acts of independent contractors.

Question 6

Implied authority is the extension of express authority by custom.

Question 7

The presence of a master-servant relationship determines whether or not a principal must pay wage taxes and withhold income taxes.

Question 8

In a master/servant relationship, the principal exercises little control over the agent.

Question 9

An independent contractor is not controlled directly by the principal.

Question 10

Agents can collect payoffs made during the course of conducting the principal's business.

Question 11

Express authority must be in writing.

Question 12

Principals and agents have a fiduciary relationship.

Question 13

Ratification requires full knowledge of the transaction.

Question 14

In an agency relationship, both the principal and agent must have legal capacity.

Question 15

The Restatement of Agency has been adopted in all states.

Question 16

The ability of a clerk in a store to accept payment for goods is an example of implied authority.

Question 17

Apparent authority and agency by estoppel are the same thing.

Question 18

An agency contract must be evidenced by a record to be valid.

Question 19

Personnel manuals have been held to constitute an employee contract.

Question 20

The public policy exception to employment at will does not afford protection for whistle-blowers.

Question 21

Firing an agent does not end apparent authority.

Question 22

Constructive notice of termination of an agent is public notice.

Question 23

A power of attorney is an example of an agency relationship.

Question 24

Agents in undisclosed principal situations never have personal liability.

Question 25

Apparent authority ends when an agent quits.

Question 26

The intentional torts of agents are never the responsibility of the principal.

Question 27

All states recognize non-compete agreements as enforceable contract clauses.

Question 28

Ratification of a contract by a principal releases the agent from all liability to the third party.

Question 29

A real estate agent who represents both buyer and seller in a transaction without disclosure to both has breached the duty of loyalty.

Question 30

Public notice of termination of an agent is not required.

Question 31

Unless protected by a statute, an agent for an unincorporated association has full liability on contracts entered into on behalf of that association.

Question 32

A master-servant relationship is one in which the principal has little control over the agent.

Question 33

An employer is only liable for its actions when hiring, not its failure to do something.

Question 34

A gratuitous agency is one in which the agent is not paid.

Question 35

Post-employment non-compete agreements are unenforceable.

Question 36

The employment-at-will doctrine prohibits the firing of nonunion or noncontract employees.

Question 37

Post-employment non-compete agreements are void.

Question 38

The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated.

Question 39

In a fully disclosed principal situation in which the agent is acting with authority, only the principal is liable on the contract.

Question 40

The duty of loyalty of an agent to a principal does not cover conflicts of interest.

Question 41

Respondeat superior is no longer applied in agency relationships.

Question 42

"Talk to Ann. She used to work here, but I think she is the best one to get this deal done for us," is an example of
express authority given to an agent.

Question 43

The Restatement of Agency:

A) is a summary of the common law agency.
B) has been adopted in all states.
C) is legislative law.
D) none of the above

Question 44

The public policy exception to the employment-at-will doctrine protects:

A) employees who are fired with cause.
B) employees who engage in illegal conduct.
C) whistle-blowers.
D) none of the above

Question 45

Under apparent authority:

A) a principal is never liable for the acts of an agent.
B) a principal is liable for creating the appearance of an agency relationship.
C) there is no agency relationship.
D) none of the above

Question 46

Express authority:

A) must be in writing.
B) can limit the agent's authority.
C) includes customary authority.
D) none of the above

Question 47

Which is a requirement for establishing apparent authority?

A) underlying express authority
B) an agency agreement
C) both a and b
D) none of the above

Question 48

There is no employer liability for negligent hiring.

Question 49

Which is not an example of an independent contractor relationship?

A) master/servant
B) lawyer/client
C) accountant/client
D) All of the above are not independent contractors.

Question 50

A sales clerk at a department store is an example of an independent contractor.

Question 51

Which is a requirement for the creation of an agency relationship?

A) a written agreement
B) principal with capacity
C) agent with capacity
D) none of the above

Question 52

An employee who is asked to take company cash to the bank on his lunch hour is not in the scope of employment during that lunch hour.

Question 53

"I'll make good on my employee's promise," is an example of a ratification.

Question 54

An employment-at-will relationship is:

A) one in which there is a definite ending date.
B) rare in the employment market.
C) now illegal.
D) none of the above

Question 55

Real estate agents would not customarily have the authority to enter into sales contracts for their clients.

Question 56

There is no apparent authority in an undisclosed principal relationship.

Question 57

Mary Scoot was hired to manage the Cactus Cart, a tiny kiosk located in Sky Harbor Airport in Phoenix. No specific duties were listed, but the business owner who hired Mary told her, "Just sell the plants and deposit the money." Mary would have the implied authority to:

A) take checks as payment.
B) change the business name.
C) sell the kiosk.
D) all of the above

Question 58

An independent contractor is not an agent of the principal.

Question 59

An unincorporated association:

A) has no liability for its members.
B) is not a principal with capacity.
C) can have agents.
D) none of the above

Question 60

A personnel manual:

A) can constitute a contract in an employment-at-will relationship.
B) can disclaim any promises made therein.
C) is never a contract.
D) none of the above

Question 61

An agent for which of these would have authority to act?

A) An unincorporated company
B) A minor
C) An incompetent person
D) None of these

Question 62

The purpose of anti-retaliation statutes is to protect:

A) employers from whistle-blowing employees.
B) government agencies from suit in the event a private employer is investigated because of an employee's claim.
C) whistle-blowing employees.
D) none of the above

Question 63

Gilda Steinforth is a partner in the law firm of Jones, Deloitte & Ernst. A wealthy couple has met with her and asked her to draw up a trust for a portion of their property. They gave Steinforth a check for $10,000 as a retainer fee and a check for $500,000 to begin the trust. Within two days after her meeting with the couple, Gilda and the checks are gone. The couple wishes to recover from Jones, Deloitte & Ernst. Which of the following statements is true?

A) The couple may not recover since Jones, Deloitte & Ernst is not responsible for the intentional torts of its employees.
B) The couple may not recover since Steinforth, as a lawyer, was an independent contractor and not a servant of the firm.
C) The couple may not recover since Steinforth had no express or implied authority to receive the checks.
D) none of the above

Question 64

In a master-servant relationship, the principal most likely will need to do which of the following?

A) Withhold income taxes for the agent
B) Pay FICA for the agent
C) Pay FUTA for the agent
D) All of these

Question 65

Which of the following is necessary to create an agency relationship?

A) consideration
B) an agent with contractual capacity
C) a ratification by the principal
D) none of the above

Question 66

Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont commutes to the bank each day from his suburban home in Mesa - a distance of 19 miles each way. Belmont's working hours are 8:00 AM to 5:00 PM and he commutes from 7:15 AM until he reaches the bank's parking garage between 7:45 and 8:00 (depending upon the traffic). If Russ is in an accident while on the freeway at 7:30 AM:

A) the bank will be liable for any injuries to third parties.
B) the bank will not be liable for any injuries to third parties.
C) Belmont is an independent contractor and the bank will have no liability for injuries or damages in the accident.
D) none of the above

Question 67

Lingering apparent authority results from:

A) the failure to give notice of termination.
B) ratification.
C) the lack of capacity on the part of the principal.
D) none of the above

Question 68

Joe Helquist and Samantha Gillis were partners in the operation of an office supply business for 32 years. Joe had always handled suppliers and Samantha was responsible for running the store and managing employees. Joe decided to retire and Samantha gave him a fine retirement dinner. Joe had some financial setbacks shortly after retirement when his wife became ill and two of his children decided to go on for their masters' degrees. Joe began ordering supplies from the usual suppliers since they were not aware of his retirement. Joe would intercept the supplies at the loading dock and then sell them on his own. Samantha soon caught the discrepancy in the bills and her inventory and refused to pay the suppliers when she learned of Joe's scheme. Which of the following statements is correct?

A) Samantha is not liable to the suppliers since Joe's authority terminated.
B) Samantha is not liable to the suppliers because Joe's acts constituted fraud.
C) Samantha is liable to the suppliers.
D) none of the above

Question 69

If the act of an agent is ratified:

A) there is retroactive authority for the act.
B) the principal has agreed to allow the agent to be liable.
C) the agent then has express authority for that act in the future.
D) none of the above

Question 70

Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice) but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is true?

A) The firm can ratify Haskin's actions and take over the contract.
B) The firm cannot ratify the contract unless Haskins had express authority to buy land.
C) If the firm ratifies the contract, the effect is that Haskins is released from liability on it.
D) none of the above

Question 71

In which of the following situations is an agent liable to third parties?

A) in a situation where there is a fully disclosed principal but only apparent authority
B) in a situation where there is a fully disclosed principal but only implied authority
C) in a situation where the principal is an unincorporated association
D) all of the above

Question 72

Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont is sent to various branches throughout the state to do audits and has an accident while en route to one of the audits. Which of the following statements is true?

A) The bank will be liable for any injuries to third parties.
B) The bank will not be liable for any injuries to third parties.
C) Belmont is a professional and an independent contractor and the bank will not be liable.
D) none of the above

Question 73

A fiduciary is required to:

A) act in the best interests of the principal.
B) eliminate all risk for the principal.
C) hire a trustee to supervise the funds involved that belong to the principal.
D) none of the above

Question 74

The breach of the fiduciary duty by an agent:

A) results in termination of the agent.
B) terminates the agent's apparent authority.
C) does not terminate an agent's implied authority.
D) none of the above

Question 75

Principals are liable for the acts of independent contractors if:

A) the acts are inherently dangerous activities.
B) the independent contractor was negligently hired.
C) both a and b
D) none of the above

Question 76

In which of the following situations does the agent have no liability to third parties?

A) contract entered into with express authority and a fully disclosed principal
B) contract entered into with no authority but later ratified in full by the principal
C) contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators
D) The agent has no liability in any of the above.

Question 77

Firing an agent terminates:

A) express authority.
B) implied authority.
C) apparent authority.
D) a and b only
E) a, b, and c

Question 78

Which of these ends apparent authority?

A) Departure of the agent
B) Retirement of the agent
C) Termination of the agent
D) None of these

Question 79

Jane and Joseph Sechrist signed a contract to have a swimming pool built in their backyard for $10,000. The salesman for the pool company signed the contract as well on a space marked "Salesperson." Two days after the contract was signed, the salesman called the Sechrists back and asked them to come in and sign a new contract for $11,000 because the vice president had not approved the original price. Jane has checked the contract and discovered that there is no language that requires the approval of anyone other than the salesperson. Jane and Joseph can have their pool built for $10,000 because:

A) the pool company was bound once Jane and Joe signed the contract.
B) the pool company has ratified the contract.
C) of misrepresentation.
D) the salesman had at least apparent authority to bind the pool company.

Question 80

Alan Freeman and Bill Freeman, brothers, operated a residential construction firm. There were three divisions of the firm: single-family homes, townhomes, and custom homes. Alan did not enjoy the demands of custom home buyers and Bill did not enjoy the cookie-cutter work of the other divisions. The brothers agreed to split the business with Bill assuming the responsibilities and contracts of the custom home division and Alan handling the remaining divisions. Alan told Bill he could continue to use the company offices until he was able to find offices of his own. Bill met his clients at the company offices, used the plans of the company and even continued to use the company stationery. Three months later Bill left town, leaving custom homes unfinished and taking the deposits of three customers with him. The customers have sued Alan. Which of the following statements is true?

A) Alan is not liable since the relationship had been terminated.
B) Alan is liable because of apparent authority.
C) Bill is not liable because he was Alan's agent.
D) none of the above