Question 1

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

Poppy has apparent authority because Nan's actions and conduct have led Odel to reasonably believe that Poppy has the authority to act on Nan's behalf, even though Poppy does not actually have the authority to do so. Apparent authority is based on the appearance of authority rather than actual authority granted.

Question 2

Ester is a lighting technician who hires out on a per-project basis to film and television production companies, as well as theatres and other venues that stage dramatic and musical performances. In this capacity, Ester is

Accepted Answer

Ester is hired on a per-project basis, which indicates that she is not an employee or a principal. Instead, she is an independent contractor who provides her services to various production companies and venues.

Question 3

Will is an agent for MaryElise. MaryElise gives Will clear instructions to only enter into contracts on Mondays, Wednesdays, or Fridays. Will enters into a contract on MaryElise's behalf on Tuesday. Will has breached

Accepted Answer

Will has breached the duty of obedience by not following MaryElise's clear instructions.

Question 4

Delite Candy Company hires Elton to sell Delite's products in a certain area. Delite agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The most important factor in whether Elton is Delite's employee is

Accepted Answer

The control Delite has over the details of the work is the most important factor in determining whether Elton is an employee or an independent contractor. The fact that Elton is receiving a salary and commission, or the length of the trial period, or even the title of his position are not as relevant in determining his employment status.

Question 5

Gayla asks Jessie to contract with Jessie's high school classmates to babysit for Gayla's new baby. Jessie orally agrees to do so. This is

Accepted Answer

The answer of Gayla asks Jessie to contract with Jessie's...

Question 6

Bernard is an expert on exotic flowers. Fine Floral Fixtures, Inc. (FFF) hires Bernard to order exotic flowers from various greenhouses. Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF. Bernard has breached

Accepted Answer

The answer of Bernard is an expert on exotic flowers....

Question 7

Julia is an agent who purchases wool for Kara's Knitting Company. In the course of her performance for Kara's Knitting Company, Julia pays for the gas for the company car and for some storage boxes for the wool. Kara's Knitting Company must reimburse Julia because of the principal's

Accepted Answer

The duty of reimbursement requires the principal (Kara's Knitting Company) to reimburse the agent (Julia) for any expenses incurred while performing tasks for the principal. Therefore, Kara's Knitting Company must reimburse Julia for the gas and storage boxes purchased.

Question 8

Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by

Accepted Answer

Sonia's authority can be implied from the position she occupies, which is as the manager of the Tasty Pastry store for United Food Company. As a manager, it is reasonable to assume that Sonia has been given the necessary authority to manage and make decisions regarding the store's operations.

Question 9

Carol is married to Andy. Carol buys food for their children's lunches and charges the cost to Andy's account. This is

Accepted Answer

The answer of Carol is married to Andy. Carol buys...

Question 10

Cory employs Daily Delivery Agency as an agent under a writ?ten agreement that describes the rights and duties of both parties. This is

Accepted Answer

The written agreement between Cory and Daily Delivery Agency defines their respective rights and duties, making it express authority.

Question 11

Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to affirm the contract. This is

Accepted Answer

This is an example of agency by ratification because Edwina has affirmed the contract that Dizzy entered into on her behalf with Frida.

Question 12

Lather Up Soap Products Company grants its agent Kathy an exclusive terri?tory in which to sell Lather Up products. The firm cannot compete with Kathy in that territory under the principal's duty of

Accepted Answer

The principal's duty of cooperation requires them to not only provide the agent with exclusive territory but also to refrain from competing with the agent in that territory. This duty ensures that the agent has a fair opportunity to succeed in their sales efforts without the principal undercutting them. Therefore, the correct answer is B) cooperation.

Question 13

Jim agrees to act on Kit's behalf, subject to Kit's control, and Kit trusts Jim to so act. This describes a relationship between

Accepted Answer

The scenario describes a principal-agent relationship, where Jim is the agent and Kit is the principal. Jim has agreed to act on Kit's behalf, subject to Kit's control, indicating that Jim will be carrying out tasks or making decisions on behalf of Kit as authorized by Kit. This type of relationship is common in business, where an agent is appointed to act on behalf of a principal to carry out business transactions.

Question 14

Mackenzie, an agent for Lindsay, signs an agreement with Kirk on Lindsay's behalf but ne?glects to tell her that the agreement requires the payment of a certain tax. The government prosecutes Lindsay for failing to pay the tax. She is

Accepted Answer

The answer of Mackenzie, an agent for Lindsay, signs an...

Question 15

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

Accepted Answer

Bob, as a salesperson at Carpets Galore, has breached the duty of loyalty by using his position to offer a personal benefit to a customer instead of acting in the best interest of the store. By keeping the money for himself instead of reporting the sale and installation to the store, he is also potentially breaching the duty of notification.

Question 16

Geoff serves in a representative capacity for Huck. To accomplish the objectives of this relationship, Geoff's authority can be implied

Accepted Answer

Implied authority can be derived from custom or usual behavior in a representative capacity. This means that because Geoff is serving in a representative capacity for Huck, his authority can be inferred from the usual practices and behaviors in that capacity. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect because they do not accurately describe how implied authority works.

Question 17

Rangle contracts with Siena to buy a certain horse for her. Rangle makes a deal with Timberline Stables, the owner of the horse, and makes a down payment. Siena fails to pay the rest of the price. Timberline sues Rangle for breach of contract. His right to hold Siena liable for any damages that he has to pay is the right of

Accepted Answer

Indemnification is the right to be reimbursed or compensated by another party for damages or losses suffered. In this case, Rangle made a deal with Timberline Stables and made a down payment for the horse, but Siena failed to pay the rest of the price. As a result, Timberline Stables sued Rangle for breach of contract. If Rangle is held liable for any damages or losses, he would have the right to hold Siena liable and seek indemnification for those damages or losses.

Question 18

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Accepted Answer

Since the agency agreement is silent on the level of sales to be achieved, Rita is expected to use reasonable diligence and skill in selling. This is the implied duty of an agent in the absence of any explicit agreement to the contrary.

Question 19

Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela to so act. They set out the terms in a written document, which they both sign. This is

Accepted Answer

The written document signed by Sela and Thom sets out the terms of their agreement and establishes an agency relationship. The fact that Thom trusts Sela to act on his behalf further supports the creation of an agency by agreement.

Question 20

George and James create an agency relationship to facilitate the sale of illegal narcotics. This agency relationship

Accepted Answer

The sale of illegal narcotics is illegal and any agency relationship created to facilitate such activities would also be illegal.

Quiz 28: Agency Relationships in Business