Question 1

Which of the following is false regarding the relationship between a principal and an independent contractor?
A)An independent contractor is not an employee of the principal.
B)The principal does not control the details of the independent contractor's performance.
C)An individual who hires an independent contractor cannot be held liable for the independent contractor's tortious actions under the doctrine of respondeat superior.
D)A principal is not liable for actions engaged in by the independent contractor,even extremely dangerous ones.
E)If an independent contractor commits a crime without the authorization of the principal,the principal is not liable for the agent's crime.

Accepted Answer

If an independent contractor engages in extremely hazardous activities,such as blasting operations,for the principal,the principal will be responsible for any damages by the independent contractor.Because of their inherently dangerous nature,certain activities may result in strict liability.Thus,an employer cannot escape the strict liability associated with those hazardous activities simply by hiring an independent contractor to complete the activities.

Question 2

What does the Latin phrase respondeat superior mean?
A)Let the superior speak
B)Let the agent speak
C)Let the employee speak
D)Let all speak
E)Let all be responsible

Accepted Answer

The term respondeat superior is a Latin phrase meaning "let the superior speak."

Question 3

Which of the following type of agency exists when a third party reasonably believes,on the basis of the principal's actions,that an agency relationship exists between the principal and another individual?
A)Express
B)Implied
C)Actual
D)Statutory
E)Apparent

Accepted Answer

Apparent agency exists when a third party reasonably believes,on the basis of the principal's actions,that an agency relationship exists between the principal and another individual.Thus,if the third party reasonably believes that the agent has the authority to represent the principal,the principal must uphold any agreements made with the agent,who has apparent authority.The principal is prevented (estopped)from acting as if the agent had no such authority.

Question 4

Which of the following is true under the Uniform Commercial Code regarding the liability of a principal to an agent if the agent enters into a contract that is a negotiable instrument?
A)The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability.
B)The principal cannot be held liable unless the principal's name is on the instrument.
C)The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity.
D)The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity.
E)The principal cannot be held liable unless the principal's name is on the instrument,the agent's signature indicates that it was made in a representative capacity,or the agent has been adjudicated insolvent.

Accepted Answer

The Uniform Commercial Code (UCC)governs negotiable instruments and states that a principal cannot be liable for a negotiable instrument if his or her name is not on the instrument or if the agent's signature does not indicate that the agreement was made in a representative capacity.

Question 5

Which of the following is true regarding an agent's liability when a third party obtains a judgment against a previously undisclosed principal?
A)The agent is freed from liability to the third party.
B)The agent remains liable to the third party.
C)The agent is freed from liability to the third party unless the principal refuses to pay.
D)The agent is freed from liability to the third party unless the principal files for bankruptcy.
E)The agent is freed from liability to the third party unless a contract for personal service was involved.

Accepted Answer

In situations in which a principal was undisclosed,a judgment for a third party against an agent,when the third party comes to know of the undisclosed principal's identity,releases the principal from liability.Also,a judgment against a previously undisclosed principal frees the agent from liability.

Question 6

Which of the following is the most typical way in which to provide constructive notice of agency termination?
A)By telephone
B)By letter
C)By posting a notice at the courthouse
D)By newspaper publication
E)By e-mail

Accepted Answer

Constructive notice is how notice of termination of an agency agreement is generally announced.Constructive notice is most frequently delivered through publication in a generally circulating newspaper for the area where the agency agreement existed.

Question 7

Which of the following is true regarding the right of a third party to reject the performance of the principal?
A)The third party may reject the performance of the principal at any time.
B)The third party may never reject the performance of the principal.
C)The third party may reject the performance of the principal if the third party entered into a contract with the agent such that the performance of the agent is required.
D)The third party may reject the performance of the principal if the third party entered into a contract with the agent such that the performance of the agent is required or the third party can establish that the third party had been involved in past litigation with the principal.
E)The third party may reject the performance of the principal if the third party entered into a contract with the agent such that the performance of the agent is required,the third party can establish that the third party had been involved in past litigation with the principal,or the principal owes money to the third party

Accepted Answer

When a third party enters into a contract with an agent requiring the performance of the agent,the third party may reject the performance of the principal.

Question 8

Which of the following is true in situations in which a principal was undisclosed and the third party comes to know of the undisclosed principal's identity but proceeds to obtain a judgment against the agent?
A)The principal is liable to the third party anyway.
B)The principal is liable to the third party,but only if the agent does not pay.
C)The principal is liable to the third party,but only if the agent files for bankruptcy.
D)The principal is released from liability to the third party.
E)The principal is released from liability unless a contract for personal service was involved.

Accepted Answer

In situations in which a principal was undisclosed,a judgment for a third party against an agent,when the third party comes to know of the undisclosed principal's identity,releases the principal from liability.

Question 9

Which of the following is true if an agent has no actual or apparent authority to act on behalf of a principal but the agent still enters into a contract with a third party?
A)The principal is bound,but only if the principal is a disclosed principal.
B)The principal is bound,but only if the principal is an unidentified principal.
C)The principal is bound,but only if the principal is a partially disclosed principal.
D)The principal is bound,but only if the principal is a disclosed or partially disclosed principal.
E)The principal is not bound unless the principal ratifies the contract.

Accepted Answer

If an agent has no authority to act on behalf of a principal but the agent still enters into a contract with a third party,the principal,regardless of the classification,is not bound to the contract unless the principal ratifies the agreement.

Question 10

When a principal is classified as a ________ principal,a third party is aware that an agent is making an agreement on behalf of the principal and the third party also knows the identity of the principal.
A)virtual
B)statutory
C)disclosed
D)partially disclosed
E)quasi-

Accepted Answer

When a third party is aware that the agent is making an agreement on behalf of a principal and the third party also knows the identity of the principal,the principal is classified as a disclosed principal.

Question 11

How long does an agent's apparent authority continue once an agency relationship is terminated?
A)It ends immediately
B)24 hours
C)7 days
D)30 days
E)Until the principal notifies third parties that the agency relationship has ended

Accepted Answer

The agent's apparent authority continues until the principal notifies third parties that the agency relationship has ended.

Question 12

Which of the following factor(s)is/are considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?
A)Whether the employer authorized the employee's act.
B)Whether the employer provided the tools by which the act occurred.
C)Whether the employer knew that the act would involve the commission of a serious crime.
D)Whether the employer authorized the employee's act,whether the employer provided the tools by which the act occurred,and whether the employer knew that the act would involve the commission of a serious crime.
E)Whether the employer authorized the employee's act and whether the employer provided the tools by which the act occurred,but not whether the employer knew that the act would involve the commission of a serious crime.

Accepted Answer

Courts consider a number of factors in determining whether an act committed by an employee occurred within the course and scope of employment,including whether the employer authorized the employee's act,whether the employer provided the tools by which the act occurred,and whether the employer knew that the act would involve the commission of a serious crime.

Question 13

Which of the following is a doctrine used in the context of the principal/employer-agent/employee relationship?
A)post hoc ergo propter hoc
B)respondeat superior
C)stare decisis
D)res judicata
E)res ipsa loquitur

Accepted Answer

The doctrine of respondeat superior is used in the context of the principal/employer-agent/employee relationship.

Question 14

Which of the following is true regarding the rights of an employer who is held liable and pays a third party not because of the employer's negligence,but under the doctrine of respondeat superior for the negligence of an employee?
A)The employer has no right to receive any reimbursement from the negligent employee.
B)The employer has the right to recover from the negligent employee one-half of any amount paid to the third party.
C)The employer has a right of indemnification from the negligent employee.
D)The employer can recover from the negligent employee any amount paid to the third party,but only if it can be shown that the employee's negligence was related to the violation of a statute.
E)The employer can recover from the negligent employee one-half of any amount paid to the third party,but only if it can be shown that the employee's negligence was related to the violation of a statute.

Accepted Answer

If the third party is able to establish employee negligence such that the employer is liable,the employer has the right to recover from the employee any damages he paid to the third party as a result of the employee's negligence.This right to recover damages is referred to as the right of indemnification.

Question 15

An agent's implied authority is derived from the agent's ________ authority.
A)express
B)apparent
C)equitable
D)statutory
E)non-contractual

Accepted Answer

An agent's implied authority is derived from the agent's express authority and consists of what is reasonably necessary for carrying out the agent's grant of express authority.

Question 16

Which of the following is true regarding the liability of an agent acting within his or her authority on a contract involving an undisclosed principal?
A)The law will likely hold the agent liable for the agreement.
B)The law will hold the agent liable for the agreement unless the contract the agent had with the principal expressly provided that the agent would not be held liable in such cases.
C)The law will hold the agent liable for the agreement unless the contract the agent had with the principal implicitly or expressly provided that the agent would not be held liable in such cases.
D)The law will hold the agent liable for the agreement unless a contract for under $500 is involved,in which case only the principal would be held liable.
E)The law would not hold the agent liable on the agreement.

Accepted Answer

When the agent acts within her authority on behalf of an undisclosed principal,the law will likely hold the agent liable for the agreement.

Question 17

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal?
A)The agent is personally liable,but only if the agent was on a mission for an unidentified principal.
B)The agent is personally liable,but only if the agent was on a mission for an unidentified principal or a partially disclosed principal.
C)The agent is liable regardless of the classification of the principal or the liability of the principal.
D)The agent is not liable if the principal is liable.
E)The agent is not liable unless the principal is insolvent.

Accepted Answer

If an agent commits a tort that injures a third party,the agent is personally liable for his or her actions,regardless of both the classification of the principal and the liability of the principal.

Question 18

The principal-employer holds ________ liability for any harm caused by the agent-employee during the time that the agent-employee is working for the principal.
A)vicarious
B)strict
C)conditional
D)absolute
E)statutory

Accepted Answer

The principal/employer holds vicarious liability (in other words,liability assigned without fault)for any harm caused by the agent/employee during the time the agent/employee is working for the principal.

Question 19

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship,he or she would want to have knowledge of which of the following?
A)Chapter IV of the Agency Relationship Law
B)Chapter VII of the Employment Relationship Law
C)Article VI of the European Union Regulations
D)Article VII of the European Union Regulations
E)Section X of the United Nations Agency Regulations

Accepted Answer

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship,he or she would want to have access to knowledge about the intricacies of Chapter IV of the Agency Relationship Law,which focuses on termination.

Question 20

Which of the following is true regarding the liability of a principal to an agent based on a contract an agent makes with a third party that expressly excludes the principal from the contract?
A)The principal is liable to the agent because it is per se unconscionable to exclude a principal from a contract.
B)The principal is liable to the agent,but only if the principal is an unidentified principal.
C)The principal is liable to the agent,but only if the principal is a partially disclosed principal.
D)The principal is liable to the agent,unless the principal gave the agent authority in writing to make the agreement with the third party.
E)The principal is not liable to the agent.

Accepted Answer

There are certain situations in which the agent is the only party liable for the contract,including when the contract expressly excludes the principal from the contract.

Quiz 20: Agency and Liability to Third Parties

Which of the following is false regarding the relationship between a principal and an independent contractor?

What does the Latin phrase respondeat superior mean?

Which of the following type of agency exists when a third party reasonably believes,on the basis of the principal's actions,that an agency relationship exists between the principal and another individual?

Which of the following is true under the Uniform Commercial Code regarding the liability of a principal to an agent if the agent enters into a contract that is a negotiable instrument?

Which of the following is true regarding an agent's liability when a third party obtains a judgment against a previously undisclosed principal?

Which of the following is the most typical way in which to provide constructive notice of agency termination?

Which of the following is true regarding the right of a third party to reject the performance of the principal?

Which of the following is true in situations in which a principal was undisclosed and the third party comes to know of the undisclosed principal's identity but proceeds to obtain a judgment against the agent?

Which of the following is true if an agent has no actual or apparent authority to act on behalf of a principal but the agent still enters into a contract with a third party?

When a principal is classified as a ________ principal,a third party is aware that an agent is making an agreement on behalf of the principal and the third party also knows the identity of the principal.

How long does an agent's apparent authority continue once an agency relationship is terminated?

Which of the following factor(s) is/are considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?

Which of the following is a doctrine used in the context of the principal/employer-agent/employee relationship?

Which of the following is true regarding the rights of an employer who is held liable and pays a third party not because of the employer's negligence,but under the doctrine of respondeat superior for the negligence of an employee?

An agent's implied authority is derived from the agent's ________ authority.

Which of the following is true regarding the liability of an agent acting within his or her authority on a contract involving an undisclosed principal?

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal?

The principal-employer holds ________ liability for any harm caused by the agent-employee during the time that the agent-employee is working for the principal.

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship,he or she would want to have knowledge of which of the following?

Which of the following is true regarding the liability of a principal to an agent based on a contract an agent makes with a third party that expressly excludes the principal from the contract?