Question 1

Watercraft Inc.employs Vern as a sales agent for a trial period.At the end of the period,Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made.Vern may demand

Accepted Answer

Vern may demand an accounting to determine the correct amount of commissions he is due. This will help resolve the disagreement between Watercraft Inc. and Vern. A constructive trust and specific performance are not relevant in this situation, and choosing "nothing" would not help resolve the dispute.

Question 2

Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects.Fred secretly buys some of the property and sells it to Energy at a profit.Fred has breached

Accepted Answer

Fred breached the duty of loyalty as he secretly bought the property and sold it to Energy at a profit without disclosing it to Energy, which goes against his obligation to act in the best interest of Energy and not seek personal gain.

Question 3

Emmett,an agent for Fridley,signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax.The government prosecutes Fridley for failing to pay the tax.He is

Accepted Answer

The answer of Emmett,an agent for Fridley,signs an agreement with...

Question 4

Denny,a certified public accountant and an investor,and Ethel,an insurance salesperson and a realtor,may create an agency relationship for

Accepted Answer

According to the law of agency, two parties can enter into an agency relationship for any legal purpose. Therefore, Denny and Ethel can create an agency relationship for any legal purpose they choose.

Question 5

Curly Fries Inc.grants its agent Dian an exclusive territory in which to sell its products.The company cannot compete with Dian in that territory under the duty of

Accepted Answer

The duty of cooperation requires Curly Fries Inc. to work with Dian to ensure her success in the exclusive territory, and not compete with her in that area. Indemnification refers to compensation for losses or damages incurred by Dian, while reimbursement refers to the repayment of expenses. None of the choices is incorrect, but only the duty of cooperation directly addresses the issue of competition in the exclusive territory.

Question 6

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm.Jon makes a deal with Lila for the sheep,but neither Jon nor Kino pays the price.Lila sues Jon for breach.Jon's right to hold Kino liable for any damages is the right to

Accepted Answer

Indemnification is the right to be reimbursed or compensated by another party for any damages or losses suffered as a result of a breach of contract. In this scenario, if Lila sues Jon for breach and Jon believes that Kino should be held responsible for any damages, Jon would have the right to seek indemnification from Kino.

Question 7

Lev,an agent for Mill Grains LLC,executes an unauthorized contract with National Grocers Inc.The deal is highly advantageous to Mill Grains,and the company ratifies the contract.The contract is

Accepted Answer

The contract is valid because Mill Grains LLC ratified the contract, even though it was initially unauthorized. Ratification by the company makes the contract legally binding and enforceable.

Question 8

Suva is an agent for Tax Accountants,Inc.On the firm's behalf and at its request,Suva pays Uzo for specially coded software.Suva's right to obtain the amount of the payment from Tax Accountants arises under the duty of

Accepted Answer

Suva is paying Uzo on behalf of Tax Accountants and therefore has a right to obtain reimbursement for the payment from Tax Accountants. This falls under the duty of reimbursement. Compensation refers to payment for services rendered, indemnification refers to protection against loss or damage, neither of which are applicable in this scenario.

Question 9

Rosa introduces Sal to her friend Trey as "my associate." Sal purports to act as Rosa's agent in a business transaction with Trey.If Rosa is liable for Sal's actions,it will be because their relationship is

Accepted Answer

The answer of Rosa introduces Sal to her friend Trey...

Question 10

Bern,a salesperson at a Carpet & Tile store,tells Dan,a customer,"Buy your flooring here,and I'll install it for less than the store would charge." Dan buys carpeting,which Bern installs for half the store's price.Bern keeps the money.With respect to the store,Bern has breached

Accepted Answer

Bern, as a salesperson, owes a duty of loyalty to the store. By offering to undercut the store's installation price and keeping the money for himself, he has breached this duty of loyalty.

Question 11

Larry is an agent for Mary.She gives him clear instructions to enter into contracts on her behalf only on Mondays,Wednesdays,or Fridays.He enters into a contract on her behalf on Tuesday.Larry has breached

Accepted Answer

Larry has breached the duty of obedience by not following Mary's clear instructions regarding the days he can enter into contracts on her behalf.

Question 12

Darla serves in a representative capacity for Ellen's Botanicals.To accomplish the objectives of this relationship,Darla's authority can be implied by

Accepted Answer

Implied authority can be established through custom, previous dealings, or industry norms. Therefore, Darla's authority as a representative for Ellen's Botanicals could be implied by custom.

Question 13

Romero employs Supply Procurement Service as an agent under a written agreement that describes the rights and duties of both parties.This is

Accepted Answer

The written agreement between Romero and Supply Procurement Service describes the authority given to Supply Procurement Service, making it express authority.

Question 14

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn.Jess orally agrees to do so.This is an agency by

Accepted Answer

This is an agency by agreement since Jess and Ingmar have entered into an oral agreement for Jess to act as an agent to contract with Kay's Lawn Service on behalf of Ingmar.

Question 15

Bread Company hires Craig to sell the company's products in a certain area.Bread agrees to pay Craig a salary,plus commission,for a trial period.They also agree that he can sell using any methods and during any hours that seem appropriate.The key factor in whether Craig is Bread's employee is

Accepted Answer

The key factor in determining whether Craig is an employee of Bread Company is the degree of control that Bread exercises over the details of his work. The fact that Craig is paid a salary plus commission and that the trial period has a specific length doesn't necessarily impact his employment status. Additionally, the size of the sales area is not relevant to whether he is an employee or not.

Question 16

Lucy is married to Marco.Lucy buys food for their children's lunches and charges the cost to Marco's account.This is an agency by

Accepted Answer

The answer of Lucy is married to Marco.Lucy buys food...

Question 17

Kit hires Lanie to manage Kit's Cattle Ranch.Lanie agrees to act on Kit's behalf,subject to Kit's control,and Kit trusts Lanie to so act.Their relationship is

Accepted Answer

Kit is the principal and Lanie is the agent, as Lanie is acting on Kit's behalf and subject to Kit's control.

Question 18

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites,as well as to the hosts of banquets and other events.In this capacity,Rosario is

Accepted Answer

Rosario is hired on a per-project basis and works independently, which makes her an independent contractor.

Question 19

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Accepted Answer

Apparent authority occurs when a third party reasonably believes that an individual has the authority to act on behalf of another, even though that individual may not actually have the express or implied authority to do so. In this scenario, Odel believes that Poppy has the authority to act on Nan's behalf based on her conduct, which would constitute apparent authority. Thus, the best choice is A) apparent authority.

Question 20

Ben manages a warehouse and its inventory for Coffee Roaster Inc.To operate this part of the business,Ben's authority can be inferred

Accepted Answer

The answer of Ben manages a warehouse and its inventory...

Quiz 14: Agency Relationships