Question 1

An agency relationship may be created only for a lawful purpose.

Accepted Answer

Agencies can be created only for a lawful purpose.

Question 2

All employees are agents of their employers,and all agents are employees.

Accepted Answer

Generally, all employees are considered agents of the employer, even those not legally authorized to enter into contracts binding their employer or to interact with third parties. However, not all agents are employees.

Question 3

Agents may have contract remedies available against a principal,but not tort remedies.

Accepted Answer

The principal owes specific duties to the agent. Failure to fulfill these rights provides the basis for a tort or contract action against the principal.

Question 4

Agents in Australia are obligated to act personally on behalf of the principal.

Accepted Answer

Agents in Australia have a unique duty, they are obligated to "act personally" on behalf of the principal.

Question 5

Which of the following was the result in Ralph T. Leonard v. Jerry D. McMorris, the case in the text involving whether under the Colorado Wage Claim Act, company executives of a bankrupt company were liable to employees for unpaid wages and benefits?

Accepted Answer

According to the court, "[T]he officers and agents of a corporation are not jointly and severally liable for payment of employee wages and other compensation the corporation owes to its employees under the employment contract and the Colorado Wage Claim Act."

Question 6

Agency law is primarily federal law.

Accepted Answer

Agency law is primarily state law.

Question 7

Which of the following is a document that gives an agent authority to sign legal documents on behalf of the principal?

Accepted Answer

A power of attorney establishes an agency by agreement that gives an agent authority to sign legal documents on behalf of the principal.

Question 8

A durable power of attorney is legally binding after the principal becomes incapacitated.

Accepted Answer

A principal may preemptively enact a durable power of attorney, a written document expressing his or her wishes for an agent's authority not to be affected by the principal's subsequent incapacity. Alternatively, a durable power of attorney might become active only after a principal becomes incapacitated in any matter.

Question 9

While an agent owes duties to a principal,the principal owes no duties to an agent.

Accepted Answer

The principal owes certain duties to the agent.

Question 10

Which of the following is a person who has a duty to act primarily for another person's benefit?

Accepted Answer

A fiduciary is a person who has a duty to act primarily for another person's benefit.

Question 11

Under which of the following does a principal give an agent broad authority to sign legal documents on behalf of the principal?

Accepted Answer

A general power of attorney grants broad authority.

Question 12

If a principal agrees to hire no other agent for a period of time or until a particular job is done,the principal and agent have entered into a[n] ______ agency contract.

Accepted Answer

If the principal agrees to hire no other agent for a period of time or until a particular job is done, the principal and agent have entered into an exclusive agency contract.

Question 13

The law assumes that the principal is only aware of information actually provided to the principal by the agent.

Accepted Answer

The law typically assumes that the principal is aware of all information revealed to the agent, regardless of whether the agent shares it with the principal.

Question 14

Which of the following is true regarding the form of authority upon which an agency relationship may be created?

Accepted Answer

Agency relationships can be created on the basis of any of the following four forms of authority:
1. By expressed agency or agency by agreement.
2. By implied authority.
3. By apparent agency, or agency by estoppel.4. By ratification.

Question 15

An individual who lacks contractual capacity may hire an agent to make contracts on his or her behalf.

Accepted Answer

An individual who does not have contractual capacity, such as a minor, cannot hire an agent to make contracts on his or her behalf.

Question 16

Which of the following was the result in Ackerman v.Sobol Family Partnership,LLP the case in the text involving whether the plaintiffs were bound by representations of their attorney regarding settlement that they had not approved?

Accepted Answer

The court found that the plaintiffs' attorney had apparent authority from his clients, that the defendants' counsel reasonably believed that plaintiffs' counsel was authorized by the plaintiffs to make the settlement offer at issue, and that defendants' counsel acted in good faith.

Question 17

If an agent breaches duties owed to the principal,the principal can sue the agent; and the principal may be entitled to a variety of contract and tort remedies beyond those stated in the contract between the principal and agent.

Accepted Answer

If the agent breaches his or her duties, the principal can sue the agent and may be entitled to a variety of contract and tort remedies beyond those stated in the contract.

Question 18

When parties form an agency relationship by making a written or oral agreement,the agency is known as a[n] ____.

Accepted Answer

When parties form an agency relationship by making a written or oral agreement, the agency is known as an expressed agency, or agency by agreement.

Question 19

Which of the following is the most common form of agency?

Accepted Answer

Expressed agency is the most common type of agency.

Question 20

A gratuitous agent is one who acts without consideration.

Accepted Answer

A gratuitous agent is one who acts without consideration.

Quiz 33: Agency Formation and Duties

An agency relationship may be created only for a lawful purpose.

All employees are agents of their employers,and all agents are employees.

Agents may have contract remedies available against a principal,but not tort remedies.

Agents in Australia are obligated to act personally on behalf of the principal.

Which of the following was the result in Ralph T. Leonard v. Jerry D. McMorris, the case in the text involving whether under the Colorado Wage Claim Act, company executives of a bankrupt company were liable to employees for unpaid wages and benefits?

Agency law is primarily federal law.

Which of the following is a document that gives an agent authority to sign legal documents on behalf of the principal?

A durable power of attorney is legally binding after the principal becomes incapacitated.

While an agent owes duties to a principal,the principal owes no duties to an agent.

Which of the following is a person who has a duty to act primarily for another person's benefit?

Under which of the following does a principal give an agent broad authority to sign legal documents on behalf of the principal?

If a principal agrees to hire no other agent for a period of time or until a particular job is done,the principal and agent have entered into a[n] ______ agency contract.

The law assumes that the principal is only aware of information actually provided to the principal by the agent.

Which of the following is true regarding the form of authority upon which an agency relationship may be created?

An individual who lacks contractual capacity may hire an agent to make contracts on his or her behalf.

Which of the following was the result in Ackerman v.Sobol Family Partnership,LLP the case in the text involving whether the plaintiffs were bound by representations of their attorney regarding settlement that they had not approved?

If an agent breaches duties owed to the principal,the principal can sue the agent; and the principal may be entitled to a variety of contract and tort remedies beyond those stated in the contract between the principal and agent.

When parties form an agency relationship by making a written or oral agreement,the agency is known as a[n] ____.

Which of the following is the most common form of agency?

A gratuitous agent is one who acts without consideration.