Question 1

For a ratification to be effective,the principal must:

Accepted Answer

A)  have knowledge of all material facts concerning the transaction. 
B)  communicate her intent to ratify to the third party. 
C)  renegotiate the contract with the third party. 
D)  All of these are correct. 
A)  have knowledge of all material facts concerning the transaction. 
B)  communicate her intent to ratify to the third party. 
C)  renegotiate the contract with the third party. 
D)  All of these are correct.

Question 2

If Carol,acting as agent for Steve,signs a contract,she alone will be personally bound by it:

Accepted Answer

A)  if Steve's name or the fact that Carol is an agent is never mentioned and Steve does not carry out the contract. 
B)  never;as an agent she is only a representative. 
C)  if she decides to sue. 
D)  if Steve is discovered by the third party to be the principal and the third party elects to hold him liable for performance. 
A)  if Steve's name or the fact that Carol is an agent is never mentioned and Steve does not carry out the contract. 
B)  never;as an agent she is only a representative. 
C)  if she decides to sue. 
D)  if Steve is discovered by the third party to be the principal and the third party elects to hold him liable for performance.

Question 3

Upon the termination of an agency,the agent's actual authority ceases.However,his apparent authority may continue until actual notice of the termination is given to third parties.

Accepted Answer

A) True 
 B)False

Question 4

When there was a contract with a previously undisclosed principal,the Third Restatement:

Accepted Answer

A)  holds that a third party's rights against the principal are alternative to the third party's rights against the agent 
B)  rejects the election rule. 
C)  follows the same rules as the Second Restatement regarding a third person's rights against a principal and agent. 
D)  All of these. 
A)  holds that a third party's rights against the principal are alternative to the third party's rights against the agent 
B)  rejects the election rule. 
C)  follows the same rules as the Second Restatement regarding a third person's rights against a principal and agent. 
D)  All of these.

Question 5

Charles states he has authority to contract for Wyatt and that he will be personally liable if he does not in fact have the authority to bind Wyatt.Identify the name and effect of Charles's statement.If Charles enters the contract without making such a statement,is there a way the same effect could result?

Accepted Answer

Charles's statement is an express warran

Question 6

Under the Second Restatement,except in cases of death or incapacity or where performance of an authorized transaction becomes impossible,actual notice of termination of agency is required to the third party if she is one:

Accepted Answer

A)  with whom the agent has dealt on credit. 
B)  to whom the agent has been specially accredited. 
C)  with whom the agent has begun to deal. 
D)  All of these. 
A)  with whom the agent has dealt on credit. 
B)  to whom the agent has been specially accredited. 
C)  with whom the agent has begun to deal. 
D)  All of these.

Question 7

Pat bought a cotton sweater at Ivey's Fashion Store.Sue,the salesperson,told her the sweater was guaranteed not to shrink if washed in cold water by hand.Pat washes the sweater as directed and it shrinks.Which of the following is correct?

Accepted Answer

A)  Pat has no recourse against the store,because it was only the salesclerk who misrepresented the sweater. 
B)  Sue has apparent authority to make warranties such as the one that she made.Therefore,the store is bound. 
C)  If Sue is only a part-time employee,Ivey has no responsibility for misrepresentations she makes. 
D)  Salesclerks are usually independent contractors.Thus,there is no liability on the part of Ivey. 
A)  Pat has no recourse against the store,because it was only the salesclerk who misrepresented the sweater. 
B)  Sue has apparent authority to make warranties such as the one that she made.Therefore,the store is bound. 
C)  If Sue is only a part-time employee,Ivey has no responsibility for misrepresentations she makes. 
D)  Salesclerks are usually independent contractors.Thus,there is no liability on the part of Ivey.

Question 8

Ann,in the presence of Betty,tells Thomas that Ann is Betty's agent.In reality,Ann had no authority.Betty hears the statement,but she says nothing.In reliance,Thomas ships goods to Betty on Ann's order.Betty is liable even though no actual authority existed.

Accepted Answer

A) True 
 B)False

Question 9

An agent who makes a contract with a third person on behalf of a disclosed principal usually is not a party to the contract.

Accepted Answer

A) True 
 B)False

Question 10

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Timothy,a prospective purchaser.If the next day Richard sends a letter to Sarah revoking her authority,but he fails to notify Timothy,Sarah:

Accepted Answer

A)  has actual authority to sell the car to Timothy. 
B)  has implied authority to sell the car to Timothy. 
C)  has apparent authority with respect to Timothy to sell the car. 
D)  is empowered under the doctrine of respondeat superior to negotiate the contract. 
A)  has actual authority to sell the car to Timothy. 
B)  has implied authority to sell the car to Timothy. 
C)  has apparent authority with respect to Timothy to sell the car. 
D)  is empowered under the doctrine of respondeat superior to negotiate the contract.

Question 11

Sunset Properties,Inc.hires William to manage its 48-unit apartment complex.Nothing is said as to expenses.William purchases fuel to heat the apartments and arranges for a repairman to do ordinary maintenance.William will be personally liable for these expenses,because he has no authority to incur them.

Accepted Answer

A) True 
 B)False

Question 12

An employer may not be held liable if her employee sells liquor to an underage person if this criminal act was unauthorized by the employer.

Accepted Answer

A) True 
 B)False

Question 13

Julie writes a letter to Mitchell authorizing him to sell her boat and sends a copy of the letter to Jared,a prospective buyer.The next day,Julie writes Mitchell a letter revoking his authority to sell the boat,but she does not send a copy of the second letter to Jared.Although Mitchell has no actual authority to sell the boat now,he continues to have apparent authority with respect to Jared.

Accepted Answer

A) True 
 B)False

Question 14

In general,an undisclosed principal and the third party to a contract are contractually bound if the agent acts within the scope of his actual authority in making the contract.

Accepted Answer

A) True 
 B)False

Question 15

An agent is personally liable for the torts he commits while in the scope of his employment.

Accepted Answer

A) True 
 B)False

Question 16

Sam is a sales representative for the INC Corporation.Sam has a terrible driving record and has had his driver's license revoked,but nevertheless he continues to drive the company car for his job.One day he drives too fast for conditions,goes through a red light,and strikes a pedestrian.The accident happened despite the fact Sam's supervisor at INC had repeatedly reprimanded him and advised him to drive more cautiously.INC has:

Accepted Answer

A)  no liability,because they did not authorize Sam to drive carelessly. 
B)  no liability,because Sam's actions were not a tort. 
C)  liability even though it did not authorize Sam to drive carelessly,because it employed an improper person as its agent. 
D)  no liability,because it has adequately supervised Sam as its agent. 
A)  no liability,because they did not authorize Sam to drive carelessly. 
B)  no liability,because Sam's actions were not a tort. 
C)  liability even though it did not authorize Sam to drive carelessly,because it employed an improper person as its agent. 
D)  no liability,because it has adequately supervised Sam as its agent.

Question 17

Samuel writes to Emma authorizing her to sell his automobile for $3,000.Emma,although she has no authority to delegate this task,asks Renaldo to try to sell the car.If Renaldo makes a contract with Michelle for the sale of the car,Samuel is not obligated to sell to Michelle,and Samuel acquires no rights against Michelle.

Accepted Answer

A) True 
 B)False

Question 18

Under the Second Restatement,which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

Accepted Answer

A)  The agent has no liability to the third person if the agent has acted within the scope of her authority. 
B)  The agent is personally liable upon the contract unless the third person discovers the existence and identity of the principal and elects to hold the principal to the contract. 
C)  Once the third person learns of the existence and identity of the principal,that third person may hold both the principal and the agent to the performance of the contract. 
D)  If the third party obtains a judgment against the principal,the agent may still have liability to that third party. 
A)  The agent has no liability to the third person if the agent has acted within the scope of her authority. 
B)  The agent is personally liable upon the contract unless the third person discovers the existence and identity of the principal and elects to hold the principal to the contract. 
C)  Once the third person learns of the existence and identity of the principal,that third person may hold both the principal and the agent to the performance of the contract. 
D)  If the third party obtains a judgment against the principal,the agent may still have liability to that third party.

Question 19

Paul is a truck driver who owns his own truck and delivers loads to various companies for nine months out of the year.For the hard winter months Paul goes to Key West to "put his feet in the sand." One evening while delivering a load for Emblem Helicopter Parts Co. ,Paul got into a "little scuffle" with a rowdy trucker who was giving Nell,a waitress at the DewDrop Inn Cafe,a hard time.Paul knocked out five of "Rowdy's" teeth.Rowdy is suing Paul and Emblem for his injuries.Discuss whether Rowdy will win against Emblem on the issue of: (a)respondeat superior and (b)unauthorized acts of agents.

Accepted Answer

(a)Respondeat superior-No.Paul is an ind

Question 20

Which of the following is correct under the Second Restatement with regard to actual notice to a third party of the termination of an agent's authority to act on behalf of the principal?

Accepted Answer

A)  Publication in a newspaper of general circulation in the area is sufficient if the third party is one with whom the agent had previously dealt on credit. 
B)  If notice is given by mail,it is effective as actual notice upon delivery to the third party. 
C)  A personal telephone call to the third party will not suffice,because actual notice must be in writing. 
D)  Actual notice is not required when the agent has been specially accredited to deal with the third party. 
A)  Publication in a newspaper of general circulation in the area is sufficient if the third party is one with whom the agent had previously dealt on credit. 
B)  If notice is given by mail,it is effective as actual notice upon delivery to the third party. 
C)  A personal telephone call to the third party will not suffice,because actual notice must be in writing. 
D)  Actual notice is not required when the agent has been specially accredited to deal with the third party.

Exam 20: Relationship With Third Parties

For a ratification to be effective,the principal must:

If Carol,acting as agent for Steve,signs a contract,she alone will be personally bound by it:

Upon the termination of an agency,the agent's actual authority ceases.However,his apparent authority may continue until actual notice of the termination is given to third parties.

When there was a contract with a previously undisclosed principal,the Third Restatement:

Under the Second Restatement,except in cases of death or incapacity or where performance of an authorized transaction becomes impossible,actual notice of termination of agency is required to the third party if she is one:

Pat bought a cotton sweater at Ivey's Fashion Store.Sue,the salesperson,told her the sweater was guaranteed not to shrink if washed in cold water by hand.Pat washes the sweater as directed and it shrinks.Which of the following is correct?

Ann,in the presence of Betty,tells Thomas that Ann is Betty's agent.In reality,Ann had no authority.Betty hears the statement,but she says nothing.In reliance,Thomas ships goods to Betty on Ann's order.Betty is liable even though no actual authority existed.

An agent who makes a contract with a third person on behalf of a disclosed principal usually is not a party to the contract.

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Timothy,a prospective purchaser.If the next day Richard sends a letter to Sarah revoking her authority,but he fails to notify Timothy,Sarah:

An employer may not be held liable if her employee sells liquor to an underage person if this criminal act was unauthorized by the employer.

In general,an undisclosed principal and the third party to a contract are contractually bound if the agent acts within the scope of his actual authority in making the contract.

An agent is personally liable for the torts he commits while in the scope of his employment.

Under the Second Restatement,which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

Which of the following is correct under the Second Restatement with regard to actual notice to a third party of the termination of an agent's authority to act on behalf of the principal?

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

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Contractual Capacity

Contracts in Writing

Third Parties to Contracts

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Introduction to Sales and Leases

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Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

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Transfer and Holder in Due Course

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Formation and Internal Relations of General Partnerships

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Legal Terminology: Understanding Criminal and Civil Law Systems

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Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

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