Question 1

What duty does a principal have concerning safe working conditions?

Accepted Answer

A)The principal has a duty to provide safe working conditions for the agent,warn
the agent of any known unsafe working conditions,and make necessary repairs.
B)The principal has a duty to provide safe working conditions for the agent,warn the agent of any known unsafe working conditions,and make necessary repairs.
C)The principal has a duty to provide safe working conditions for the agent,warn the agent of any known unsafe working conditions,and make necessary repairs.
D)The principal has a duty to provide safe working conditions for the agent,warn the agent of any known unsafe working conditions,and make necessary repairs.
E)The principal has a duty to provide safe working conditions for the agent,warn the agent of any known unsafe working conditions,and make necessary repairs.

Question 2

In the text case Uber v.Berwick,a driver for a car service argued she was an employee and not an independent contractor,and sought overtime pay and reimbursement for on-the-job expenses.Which of the following was the result?

Accepted Answer

A)The court held,"Defendants are involved in every aspect of the operation.Defendant's vet perspective drivers,who must provide to Defendant's their personal banking and residence information,as well as their Social Security Number ...Defendant's control the tools the drivers use;for example,drivers must register their cars with Defendants,and none of their cars can be more than ten years old.Defendant's monitor the Transportation Drivers' approval ratings and terminate their access to the application if the rating falls below a specific level 4.6 stars)."
B)The court held,"Defendants are involved in every aspect of the operation.Defendant's vet perspective drivers,who must provide to Defendant's their personal banking and residence information,as well as their Social Security Number ...Defendant's control the tools the drivers use;for example,drivers must register their cars with Defendants,and none of their cars can be more than ten years old.Defendant's monitor the Transportation Drivers' approval ratings and terminate their access to the application if the rating falls below a specific level 4.6 stars)."
C)The court held,"Defendants are involved in every aspect of the operation.Defendant's vet perspective drivers,who must provide to Defendant's their personal banking and residence information,as well as their Social Security Number ...Defendant's control the tools the drivers use;for example,drivers must register their cars with Defendants,and none of their cars can be more than ten years old.Defendant's monitor the Transportation Drivers' approval ratings and terminate their access to the application if the rating falls below a specific level 4.6 stars)."
D)The court held,"Defendants are involved in every aspect of the operation.Defendant's vet perspective drivers,who must provide to Defendant's their personal banking and residence information,as well as their Social Security Number ...Defendant's control the tools the drivers use;for example,drivers must register their cars with Defendants,and none of their cars can be more than ten years old.Defendant's monitor the Transportation Drivers' approval ratings and terminate their access to the application if the rating falls below a specific level 4.6 stars)."

Question 3

Meryl is an avid doll collector and has been searching for the Beach Doll to complete her 200- piece collection.There were only 5 Beach Dolls created in the world.Meryl is envious of her neighbor Nancy,who has the first Beach Doll ever created.Nancy refuses to sell the doll because she thinks it will be worth a million dollars someday.While Nancy is on vacation,Meryl hires Alex to steal the doll from Nancy's home.Has an agency relationship been formed?

Accepted Answer

A)An agency relationship can only be formed if it is being created for a lawful
purpose.When Meryl hired Alex to steal from Nancy,the request was illegal and thus,did not form an agency relationship.
B)An agency relationship can only be formed if it is being created for a lawful purpose.When Meryl hired Alex to steal from Nancy,the request was illegal and thus,did not form an agency relationship.
C)An agency relationship can only be formed if it is being created for a lawful purpose.When Meryl hired Alex to steal from Nancy,the request was illegal and thus,did not form an agency relationship.
D)An agency relationship can only be formed if it is being created for a lawful purpose.When Meryl hired Alex to steal from Nancy,the request was illegal and thus,did not form an agency relationship.
E)An agency relationship can only be formed if it is being created for a lawful purpose.When Meryl hired Alex to steal from Nancy,the request was illegal and thus,did not form an agency relationship.

Question 4

[Overstock] Mark owns an electronic resale store.Before Mark left for the weekend,he told Charlie,an employee,not to purchase any more compact discs CDs)from customers because they were already having a difficult time selling the ones they had in stock.While Mark is gone,Charlie forgets Mark's instructions and buys nine CDs from customers.
-Which of the following statements is true regarding Charlie's liability to Mark?

Accepted Answer

A)A principal can recover if an agent fails to follow the principal's instructions.In
this situation,Charlie failed to follow Mark's instructions because he purchased CDs and Mark can recover the cost of the nine CDs.
B)A principal can recover if an agent fails to follow the principal's instructions.In this situation,Charlie failed to follow Mark's instructions because he purchased CDs and Mark can recover the cost of the nine CDs.
C)A principal can recover if an agent fails to follow the principal's instructions.In this situation,Charlie failed to follow Mark's instructions because he purchased CDs and Mark can recover the cost of the nine CDs.
D)A principal can recover if an agent fails to follow the principal's instructions.In this situation,Charlie failed to follow Mark's instructions because he purchased CDs and Mark can recover the cost of the nine CDs.
E)A principal can recover if an agent fails to follow the principal's instructions.In this situation,Charlie failed to follow Mark's instructions because he purchased CDs and Mark can recover the cost of the nine CDs.

Question 5

Which of the following refers to the agent's duty to act in the best interest of the principal?

Accepted Answer

A)The agent has a duty of loyalty,meaning the agent has a responsibility to act in
the best interest of the principal.This duty is important because the agency relationship is founded on trust.
B)The agent has a duty of loyalty,meaning the agent has a responsibility to act in the best interest of the principal.This duty is important because the agency relationship is founded on trust.
C)The agent has a duty of loyalty,meaning the agent has a responsibility to act in the best interest of the principal.This duty is important because the agency relationship is founded on trust.
D)The agent has a duty of loyalty,meaning the agent has a responsibility to act in the best interest of the principal.This duty is important because the agency relationship is founded on trust.
E)The agent has a duty of loyalty,meaning the agent has a responsibility to act in the best interest of the principal.This duty is important because the agency relationship is founded on trust.

Question 6

What if instead of Mark directing Charlie not to buy any CDs he said,"I don't think it is a good idea to buy CDs because we cannot sell the ones we have in stock." Charlie still purchased nine CDs from customers.Would Charlie be liable to Mark?

Accepted Answer

A)Courts have had difficulty determining whether a principal gives limiting instructions and when he or she is merely giving advice.Going against advice does not impose liability on an agent,but violating a limiting instruction does.When Mark says that he does not think it is a good idea,he is merely giving advise and not a limiting instruction on Charlie's performance.Therefore,Charlie will not be liable to Mark.
B)Courts have had difficulty determining whether a principal gives limiting instructions and when he or she is merely giving advice.Going against advice does not impose liability on an agent,but violating a limiting instruction does.When Mark says that he does not think it is a good idea,he is merely giving advise and not a limiting instruction on Charlie's performance.Therefore,Charlie will not be liable to Mark.
C)Courts have had difficulty determining whether a principal gives limiting instructions and when he or she is merely giving advice.Going against advice does not impose liability on an agent,but violating a limiting instruction does.When Mark says that he does not think it is a good idea,he is merely giving advise and not a limiting instruction on Charlie's performance.Therefore,Charlie will not be liable to Mark.
D)Courts have had difficulty determining whether a principal gives limiting instructions and when he or she is merely giving advice.Going against advice does not impose liability on an agent,but violating a limiting instruction does.When Mark says that he does not think it is a good idea,he is merely giving advise and not a limiting instruction on Charlie's performance.Therefore,Charlie will not be liable to Mark.
E)Courts have had difficulty determining whether a principal gives limiting instructions and when he or she is merely giving advice.Going against advice does not impose liability on an agent,but violating a limiting instruction does.When Mark says that he does not think it is a good idea,he is merely giving advise and not a limiting instruction on Charlie's performance.Therefore,Charlie will not be liable to Mark.

Question 7

What should Melanie seek if she wants possession of the lakeside lot Kumar purchased?

Accepted Answer

A)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 someone who wrongfully obtains or holds legal right to property he or she should not possess.The court then rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.
B)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 someone who wrongfully obtains or holds legal right to property he or she should not possess.The court then rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.
C)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 someone who wrongfully obtains or holds legal right to property he or she should not possess.The court then rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.
D)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 someone who wrongfully obtains or holds legal right to property he or she should not possess.The court then rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.
E)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 someone who wrongfully obtains or holds legal right to property he or she should not possess.The court then rules that the agent is merely holding the property or goods in trust for the principal,granting the principal legal right or possession.

Question 8

When determining whether a worker is an independent contract or an employee,one of the most important considerations is ,which is when the employer has the right to substantially control the worker's day-to-day operations.

Accepted Answer

A)When courts are deciding whether a worker is an employee or an independent
contractor,perhaps the most important consideration is employer control.If the employer has the right to substantially control the worker's day-to-day operations,the worker is generally considered an employee.
B)When courts are deciding whether a worker is an employee or an independent contractor,perhaps the most important consideration is employer control.If the employer has the right to substantially control the worker's day-to-day operations,the worker is generally considered an employee.
C)When courts are deciding whether a worker is an employee or an independent contractor,perhaps the most important consideration is employer control.If the employer has the right to substantially control the worker's day-to-day operations,the worker is generally considered an employee.
D)When courts are deciding whether a worker is an employee or an independent contractor,perhaps the most important consideration is employer control.If the employer has the right to substantially control the worker's day-to-day operations,the worker is generally considered an employee.
E)When courts are deciding whether a worker is an employee or an independent contractor,perhaps the most important consideration is employer control.If the employer has the right to substantially control the worker's day-to-day operations,the worker is generally considered an employee.

Question 9

What type of agency is formed when it appears an agency relationship exists based on the conduct of the parties?

Accepted Answer

A)Agency by implied authority occurs when the agency relationship is implied by
the conduct of the parties.
B)Agency by implied authority occurs when the agency relationship is implied by the conduct of the parties.
C)Agency by implied authority occurs when the agency relationship is implied by the conduct of the parties.
D)Agency by implied authority occurs when the agency relationship is implied by the conduct of the parties.
E)Agency by implied authority occurs when the agency relationship is implied by the conduct of the parties.

Question 10

When an individual misrepresents himself or herself as another party's agent and the principal accepts the unauthorized act,which of the following has occurred?

Accepted Answer

A)An agency by ratification occurs when a principal accepts an unauthorized act by
a person that misrepresented himself or herself as a party's agent.
B)An agency by ratification occurs when a principal accepts an unauthorized act by a person that misrepresented himself or herself as a party's agent.
C)An agency by ratification occurs when a principal accepts an unauthorized act by a person that misrepresented himself or herself as a party's agent.
D)An agency by ratification occurs when a principal accepts an unauthorized act by a person that misrepresented himself or herself as a party's agent.
E)An agency by ratification occurs when a principal accepts an unauthorized act by a person that misrepresented himself or herself as a party's agent.

Question 11

Which of the following is true regarding agency contracts?

Accepted Answer

A)A contract is not necessary to form an agency relationship,but if there is a
contract between the agent and the principal,it must meet all the elements of a valid contract.
B)A contract is not necessary to form an agency relationship,but if there is a contract between the agent and the principal,it must meet all the elements of a valid contract.
C)A contract is not necessary to form an agency relationship,but if there is a contract between the agent and the principal,it must meet all the elements of a valid contract.
D)A contract is not necessary to form an agency relationship,but if there is a contract between the agent and the principal,it must meet all the elements of a valid contract.
E)A contract is not necessary to form an agency relationship,but if there is a contract between the agent and the principal,it must meet all the elements of a valid contract.

Question 12

In the text case Glenn v.Gibbs,Glenn was injured and eventually died from his injuries as a direct result of trimming Gibbs' tree limbs.Glenn's wife sued Gibbs for negligence alleging Gibbs' actions and omissions caused Glenn's death.Which of the following was the result?

Accepted Answer

A)The court held Glenn was an independent contractor because he determined when he would trim the limbs,and the manner,method,and means of trimming the limbs.Further,there was no evidence Gibbs retained the right to control these factors.As a result,the evidence supported Glenn was an independent contractor,not an employee.
B)The court held Glenn was an independent contractor because he determined when he would trim the limbs,and the manner,method,and means of trimming the limbs.Further,there was no evidence Gibbs retained the right to control these factors.As a result,the evidence supported Glenn was an independent contractor,not an employee.
C)The court held Glenn was an independent contractor because he determined when he would trim the limbs,and the manner,method,and means of trimming the limbs.Further,there was no evidence Gibbs retained the right to control these factors.As a result,the evidence supported Glenn was an independent contractor,not an employee.
D)The court held Glenn was an independent contractor because he determined when he would trim the limbs,and the manner,method,and means of trimming the limbs.Further,there was no evidence Gibbs retained the right to control these factors.As a result,the evidence supported Glenn was an independent contractor,not an employee.
E)The court held Glenn was an independent contractor because he determined when he would trim the limbs,and the manner,method,and means of trimming the limbs.Further,there was no evidence Gibbs retained the right to control these factors.As a result,the evidence supported Glenn was an independent contractor,not an employee.

Question 13

[Lakeside Property] Kumar agreed to act as the agent of Melanie in finding a piece of lakeside property for her at a good price,and also in obtaining a loan for her with which to purchase the property.She agreed to pay him$500 for doing so.To assist Kumar in his duties,Melanie disclosed to him confidential information about her finances and debts.Kumar decided that he needed help and paid Rick $300 to look for property for Melanie.Rick told Kumar about a great deal on a piece of lakeside property that Phil had for sale.In fact,the deal was so good that Kumar purchased the property for himself.When Melanie found out about the property Kumar bought for himself,she complained to Kumar.He defended himself on the basis that he was not actually working for Melanie when he found out about the deal.At the time,he was playing golf with Phil.He also told Melanie that he had hired Rick for $300 to assist him and that he could not be held liable because he had turned the job over to Rick.He asked Melanie for reimbursement of the amount he paid Rick.Melanie fired Kumar threatening to sue him.Kumar told Melanie that he would counterclaim for the $300 owed to Rick.After he was fired,Kumar disclosed to a number of parties information regarding Melanie's spending habits which he thought were excessive.
-If Melanie sues Kumar for purchasing the property from Phil instead of offering it to her,which of the following is the most likely result?

Accepted Answer

A)A principal always has a right of first refusal;therefore,an agent may not use the
agency relationship to obtain goods or property for himself or herself when the principal desired the same goods or property.
B)A principal always has a right of first refusal;therefore,an agent may not use the agency relationship to obtain goods or property for himself or herself when the principal desired the same goods or property.
C)A principal always has a right of first refusal;therefore,an agent may not use the agency relationship to obtain goods or property for himself or herself when the principal desired the same goods or property.
D)A principal always has a right of first refusal;therefore,an agent may not use the agency relationship to obtain goods or property for himself or herself when the principal desired the same goods or property.
E)A principal always has a right of first refusal;therefore,an agent may not use the agency relationship to obtain goods or property for himself or herself when the principal desired the same goods or property.

Question 14

Which of the following is the best solution for a U.S.company that is attempting to enter a foreign market but is having difficulty due to a language barrier and lack of knowledge?

Accepted Answer

A)Agency law is especially important for U.S.firms doing business globally.While
foreign countries offer fresh markets and eager consumers,U.S.companies often run into legal difficulties due to language barriers or lack of knowledge about local laws.To avoid such problems,many companies hire agents familiar with local laws,customs,and customers to help them function smoothly in foreign markets.

Question 15

Robert has agreed to act as an agent for Jill.Which of the following scenarios requires the agency agreement be in writing?

Accepted Answer

A)When an agent is given power of attorney,the agreement must be in writing in
order to be enforceable.
B)When an agent is given power of attorney,the agreement must be in writing in order to be enforceable.
C)When an agent is given power of attorney,the agreement must be in writing in order to be enforceable.
D)When an agent is given power of attorney,the agreement must be in writing in order to be enforceable.
E)When an agent is given power of attorney,the agreement must be in writing in order to be enforceable.

Question 16

Which of the following is true regarding any right of reimbursement Paolo is due from Joe?

Accepted Answer

A)Suppose an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement.The third party could sue the agent for damages,but the principal has a duty to indemnify the agent for the losses the third party regains.
B)Suppose an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement.The third party could sue the agent for damages,but the principal has a duty to indemnify the agent for the losses the third party regains.
C)Suppose an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement.The third party could sue the agent for damages,but the principal has a duty to indemnify the agent for the losses the third party regains.
D)Suppose an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement.The third party could sue the agent for damages,but the principal has a duty to indemnify the agent for the losses the third party regains.
E)Suppose an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement.The third party could sue the agent for damages,but the principal has a duty to indemnify the agent for the losses the third party regains.

Question 17

If Melanie sues Kumar for revealing confidential information,which of the following is the most likely result?

Accepted Answer

A)The duty of loyalty also requires that the agent keep confidential any information about the principal,during the course of agency as well as after the agency relationship has been terminated.
B)The duty of loyalty also requires that the agent keep confidential any information about the principal,during the course of agency as well as after the agency relationship has been terminated.
C)The duty of loyalty also requires that the agent keep confidential any information about the principal,during the course of agency as well as after the agency relationship has been terminated.
D)The duty of loyalty also requires that the agent keep confidential any information about the principal,during the course of agency as well as after the agency relationship has been terminated.
E)The duty of loyalty also requires that the agent keep confidential any information about the principal,during the course of agency as well as after the agency relationship has been terminated.

Question 18

Which of the following refers to the principal's duty to assist the agent with his or her duties and not interfere with the agent's reasonable conduct?

Accepted Answer

A)The principal has a duty of cooperation,meaning the principal must assist the
agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.
B)The principal has a duty of cooperation,meaning the principal must assist the agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.
C)The principal has a duty of cooperation,meaning the principal must assist the agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.
D)The principal has a duty of cooperation,meaning the principal must assist the agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.
E)The principal has a duty of cooperation,meaning the principal must assist the agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.

Question 19

When an agent breaches an agency contract,the principal may use his or her right of _ to nullify at his or her discretion any contract the agent negotiated.

Accepted Answer

A)In the event an agent breaches the agency contract,the principal may use his or
her right of avoidance to nullify at his or her discretion any contract the agent negotiated.
B)In the event an agent breaches the agency contract,the principal may use his or her right of avoidance to nullify at his or her discretion any contract the agent negotiated.
C)In the event an agent breaches the agency contract,the principal may use his or her right of avoidance to nullify at his or her discretion any contract the agent negotiated.
D)In the event an agent breaches the agency contract,the principal may use his or her right of avoidance to nullify at his or her discretion any contract the agent negotiated.
E)In the event an agent breaches the agency contract,the principal may use his or her right of avoidance to nullify at his or her discretion any contract the agent negotiated.

Question 20

Which of the following is the most likely result if Kumar sues Melanie for the $300 paid to Rick?

Accepted Answer

A)The agent must perform the duties as specified in the agency agreement.
B)The agent must perform the duties as specified in the agency agreement.
C)The agent must perform the duties as specified in the agency agreement.
D)The agent must perform the duties as specified in the agency agreement.
E)The agent must perform the duties as specified in the agency agreement.

Quiz 33: Agency Formation and Duties