Question 1

When a contract exists and a principal agrees to certain conditions but fails to perform,which of the following may the agent seek in order to force the principal to perform the contract as stipulated?

Accepted Answer

When a contract exists and a principal agrees to certain conditions but fails to perform,the agent may seek court assistance in forcing the principal to perform the contract as stipulated.This is known as a request for specific performance.

Question 2

Which of the following is the term used to describe the duty an agent has to follow the lawful instruction and direction of the principal?

Accepted Answer

Under the duty of obedience,the agent must follow the lawful instruction and direction of the principal.Thus,if the agent makes an unauthorized agreement,the agent has failed to meet the duty of obedience.

Question 3

A person in a position of trust and confidence is known as a(n)________.

Accepted Answer

A person in a position of trust and confidence is known as a fiduciary.When an agent agrees to act on behalf of a principal,the agent is a fiduciary,and as such owes certain duties to the principal.

Question 4

Express authority is often referred to as ________ authority.

Accepted Answer

In an expressed agency relationship,the agent has express authority,which is often referred to as actual authority.The principal has explicitly instructed the agent to do something.

Question 5

In most situations,how many principals may an agent represent in any one agreement?

Accepted Answer

An agent can in most situations represent and act on behalf of only one principal in an agreement.

Question 6

When an agency relationship is not contractual or the contract is for personal services,the agent ________.

Accepted Answer

When a contract exists and a principal agrees to certain conditions but fails to perform,the agent may seek specific performance.However,when an agency relationship is not contractual or the contract is for personal services,the agent does not have the right to seek specific performance.

Question 7

An agent cannot represent both the principal and a third party in an agreement because there could be a(n)________.

Accepted Answer

An agent can in most situations represent and act on behalf of only one principal in an agreement.An agent usually cannot represent both the principal and a third party (who would then become another principal if represented by the same agent)in an agreement because there could be a conflict of interest.

Question 8

An agent's duty of ________ to the principal includes the agent's obligation to perform the duties as specified in the agency agreement.

Accepted Answer

The agent owes a duty of performance to the principal.This includes the agent's obligation to perform the duties as specified in the agency agreement.

Question 9

Which of the following is true if a principal and an agent have no agreement regarding the amount for which the principal will compensate the agent?

Accepted Answer

If the principal and agent have no agreement regarding compensation for the agent,a court will calculate compensation according to the customary fee in the situation.

Question 10

A(n)________ trust is an equitable trust imposed on one who wrongfully obtains or holds legal right to property he or she should not possess.

Accepted Answer

When an agent illegally benefits from the agency relationship,the principal may enact a constructive trust on the profits,goods,or property in question.A constructive trust is an equitable trust imposed on a person who wrongfully obtains or holds legal right to property he or she should not possess.When a principal enacts a constructive trust,the court rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.

Question 11

An agent may demand ________ if the agent believes that he or she is not being properly compensated.

Accepted Answer

When an agent feels she is not being properly compensated,especially when working on commission,the agent may demand an accounting.When an agent demands an accounting,he or she may withhold further performance of duties until the principal supplies appropriate accounting data.

Question 12

Pursuant to the duty of ________,the agent must communicate to the principal offers from third parties,and he or she must also communicate any information the agent thinks could be important to the principal.

Accepted Answer

Not only does the agent have to communicate offers from third parties,but the agent must also communicate any information the agent thinks could be important to the principal.This is known as the duty of notification.

Question 13

________ is the right of a principal to sue an agent to recover any amount assessed against the principal for a breach of contract caused by the agent's negligence.

Accepted Answer

Agents enter into contracts with third parties on behalf of a principal.If a third party believes that the agent is acting with actual or apparent authority,he or she may sue the principal for any breach of contract.However,when the breach was caused by the agent's negligence,the principal has a right to indemnification.That is,when sued by a third party,a principal may sue his or her agent to recover the amount assessed to the third party if the breach of contract is the agent's fault.

Question 14

Which of the following is false regarding a principal's duties to an agent?

Accepted Answer

If the agent is successful in bringing a suit against the principal,the agent is entitled to contract or tort remedies.

Question 15

In an express agency relationship,the agent has ________ authority.

Accepted Answer

In an expressed agency relationship,the agent has express authority.

Question 16

An agent's obligation to perform the duties specified in the agency agreement with reasonable skill and care is part of the agent's duty of ________.

Accepted Answer

The agent owes a duty of performance to the principal.This includes an obligation to perform the duties specified in the agency agreement with reasonable skill and care.The agent is expected to provide the same standards of skill,care,and professionalism that a reasonable person in the same situation would provide.

Question 17

Which of the following is true regarding the status of an agent as a fiduciary?

Accepted Answer

When an agent agrees to act on behalf of a principal,the agent is a fiduciary,a person in a position of trust and confidence,and as such owes certain duties to the principal.

Question 18

When express authority is granted for an agent to enter into a contract legally required to be in writing,most states require the grant of authority to also be in writing.This requirement is known as the ________.

Accepted Answer

According to the equal dignity rule,when express authority is granted for an agent to enter into a contract legally required to be in writing,the grant of authority must also be in writing.

Question 19

In which type(s)of agency is the principal-agent relationship inferred from the conduct of the parties?

Accepted Answer

In an implied agency relationship,the agent has implied authority; that is,the relationship is inferred from the conduct of the parties.Consequently,the authority of the agent is implied on the basis of words and actions of the principal to the agent.

Question 20

The equal dignity rule is based upon the ________.

Accepted Answer

When express authority is granted for an agent to enter into a contract legally required to be in writing,most states require the grant of authority to also be in writing.This requirement is known as the equal dignity rule.When an agency agreement fails to adhere to the equal dignity rule,the subsequent contracts are typically considered voidable by the principal.The equal dignity rule is based on the statute of frauds.

Quiz 20: Agency and Liability to Third Parties