Question 1

The Second and Third Restatements are the same regarding when an agent's apparent authority ceases.

Accepted Answer

A) True 
 B)False

Question 2

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

Accepted Answer

A) True 
 B)False

Question 3

Authority that is not found in the express or explicit words of the principal,but that is inferred from the words is known as:

Accepted Answer

A)  apparent authority. 
B)  indirect authority. 
C)  delegated authority. 
D)  None of these. 
A)  apparent authority. 
B)  indirect authority. 
C)  delegated authority. 
D)  None of these.

Question 4

Respondeat superior:

Accepted Answer

A)  imposes vicarious liability on the agent. 
B)  makes a principal liable for the acts of independent contractors. 
C)  imposes vicarious liability on the principal for employees' acts committed within the scope of employment. 
D)  makes the agent responsible for his own acts 
A)  imposes vicarious liability on the agent. 
B)  makes a principal liable for the acts of independent contractors. 
C)  imposes vicarious liability on the principal for employees' acts committed within the scope of employment. 
D)  makes the agent responsible for his own acts

Question 5

Which of the following is true regarding an agent who is acting for an undisclosed principal?

Accepted Answer

A)  The agent with actual authority will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud. 
A)  The agent with actual authority will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud.

Question 6

Seth grants express authority to Reba to enter contracts on his behalf.If Reba discloses to third parties that she is an agent for Seth,she has liability on a contract in all but which of the following situations?

Accepted Answer

A)  Reba makes a contract in her own name. 
B)  Reba makes a contract within the scope of her authority and discloses that she is acting for Seth. 
C)  Reba co-makes a contract with Seth. 
D)  Reba guarantees that Seth will perform the contract. 
E)  Reba cannot be held liable on a contract when she discloses she is Seth's agent as long as the contract is within her scope of authority. 
A)  Reba makes a contract in her own name. 
B)  Reba makes a contract within the scope of her authority and discloses that she is acting for Seth. 
C)  Reba co-makes a contract with Seth. 
D)  Reba guarantees that Seth will perform the contract. 
E)  Reba cannot be held liable on a contract when she discloses she is Seth's agent as long as the contract is within her scope of authority.

Question 7

The contract liability of the principal may depend upon whether the principal is disclosed,unidentified (partially disclosed),or undisclosed.

Accepted Answer

A) True 
 B)False

Question 8

Under the Uniform Durable Power of Attorney Act,if a principal who has executed a written durable power of attorney becomes incapacitated,the actual authority of an agent survives.

Accepted Answer

A) True 
 B)False

Question 9

Ratification:

Accepted Answer

A)  can only occur after the third person withdraws from the transaction and gives notice of such withdrawal. 
B)  can be effected by a disclosed or an undisclosed principal according to the Second Restatement. 
C)  relieves the agent of any liability she may have to the third party by reason of her having induced the third party to enter the contract without the principal's authority. 
D)  may be made by a principal that was not in existence at the time the contract was made. 
A)  can only occur after the third person withdraws from the transaction and gives notice of such withdrawal. 
B)  can be effected by a disclosed or an undisclosed principal according to the Second Restatement. 
C)  relieves the agent of any liability she may have to the third party by reason of her having induced the third party to enter the contract without the principal's authority. 
D)  may be made by a principal that was not in existence at the time the contract was made.

Question 10

If an agent exceeds his actual and apparent authority,the principal is not bound,which makes the agent a party to the contract.

Accepted Answer

A) True 
 B)False

Question 11

Bryant,doing business as Fair Realty,employs Chris and Deborah as salespersons.Tammy contracts with Bryant to sell her house because she is aware of the good reputation of Fair Realty's salespersons.In this situation:

Accepted Answer

A)  Chris and Deborah are agents of Tammy and Fair Realty but they have no authority to show Tammy's house to prospective purchasers and to make representations about the house unless Tammy expressly and explicitly grants this authority directly to them. 
B)  Chris and Deborah are employees/agents of Fair Realty and subagents of Tammy,and they have authority to show Tammy's house to prospective purchasers and to make representations about the house. 
C)  Bryant cannot appoint subagents because Tammy's appointment of him reflected her confidence in and reliance upon his personal skill,integrity,and other qualifications. 
D)  Chris and Deborah are subagents of Fair Realty and,as such,have a fiduciary duty only to Fair Realty. 
A)  Chris and Deborah are agents of Tammy and Fair Realty but they have no authority to show Tammy's house to prospective purchasers and to make representations about the house unless Tammy expressly and explicitly grants this authority directly to them. 
B)  Chris and Deborah are employees/agents of Fair Realty and subagents of Tammy,and they have authority to show Tammy's house to prospective purchasers and to make representations about the house. 
C)  Bryant cannot appoint subagents because Tammy's appointment of him reflected her confidence in and reliance upon his personal skill,integrity,and other qualifications. 
D)  Chris and Deborah are subagents of Fair Realty and,as such,have a fiduciary duty only to Fair Realty.

Question 12

An employer can be liable for an agent's negligence,but he will never be liable for his intentional torts.

Accepted Answer

A) True 
 B)False

Question 13

Ratification and adoption of contracts have the same effect;they are both retroactive and both release the purported agent.

Accepted Answer

A) True 
 B)False

Question 14

Roger is the promoter of a new as-of-yet unincorporated business.As promoter,he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The future corporation is liable on the contract,because Roger is its agent.

Accepted Answer

A) True 
 B)False

Question 15

A subagent owes a fiduciary duty to only the principal.

Accepted Answer

A) True 
 B)False

Question 16

Unless otherwise agreed,an agent making a contract for an unidentified principal is not a party to the contract.

Accepted Answer

A) True 
 B)False

Question 17

If Sierra orally requests her agent Scott to sell her desk for at least $450,Scott's authority to sell the desk for this amount is actual and express.

Accepted Answer

A) True 
 B)False

Question 18

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true with regard to contractual relations between the principal and a third party?

Accepted Answer

A)  There is no liability on the part of the principal if the agent acts with implied authority. 
B)  An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority,unless the contract specifies otherwise. 
C)  Under the Second Restatement,no principal is bound if the agent acts without any authority. 
D)  A partially disclosed principal is bound only if the agent acts within the scope of actual authority. 
A)  There is no liability on the part of the principal if the agent acts with implied authority. 
B)  An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority,unless the contract specifies otherwise. 
C)  Under the Second Restatement,no principal is bound if the agent acts without any authority. 
D)  A partially disclosed principal is bound only if the agent acts within the scope of actual authority.

Question 20

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

Accepted Answer

A) True 
 B)False

Exam 20: Relationship With Third Parties

The Second and Third Restatements are the same regarding when an agent's apparent authority ceases.

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

Authority that is not found in the express or explicit words of the principal,but that is inferred from the words is known as:

Respondeat superior:

Which of the following is true regarding an agent who is acting for an undisclosed principal?

Seth grants express authority to Reba to enter contracts on his behalf.If Reba discloses to third parties that she is an agent for Seth,she has liability on a contract in all but which of the following situations?

The contract liability of the principal may depend upon whether the principal is disclosed,unidentified (partially disclosed),or undisclosed.

Under the Uniform Durable Power of Attorney Act,if a principal who has executed a written durable power of attorney becomes incapacitated,the actual authority of an agent survives.

Ratification:

If an agent exceeds his actual and apparent authority,the principal is not bound,which makes the agent a party to the contract.

Bryant,doing business as Fair Realty,employs Chris and Deborah as salespersons.Tammy contracts with Bryant to sell her house because she is aware of the good reputation of Fair Realty's salespersons.In this situation:

An employer can be liable for an agent's negligence,but he will never be liable for his intentional torts.

Ratification and adoption of contracts have the same effect;they are both retroactive and both release the purported agent.

Roger is the promoter of a new as-of-yet unincorporated business.As promoter,he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The future corporation is liable on the contract,because Roger is its agent.

A subagent owes a fiduciary duty to only the principal.

Unless otherwise agreed,an agent making a contract for an unidentified principal is not a party to the contract.

If Sierra orally requests her agent Scott to sell her desk for at least $450,Scott's authority to sell the desk for this amount is actual and express.

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

Which of the following is true with regard to contractual relations between the principal and a third party?

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

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

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms