Question 1

An agent is not required to keep which of the following information confidential?

Accepted Answer

A)  Unique business methods 
B)  Customer lists 
C)  Information that his or her principal is engaged in criminal activity 
D)  Business plans 
A)  Unique business methods 
B)  Customer lists 
C)  Information that his or her principal is engaged in criminal activity 
D)  Business plans

Question 2

Because the authority given to an agent by a principal is strictly personal,the agent's death terminates the agency.

Accepted Answer

A) True 
 B)False

Question 3

The duty of ____ requires the agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions and directions given by the principal.

Accepted Answer

A)  accounting 
B)  obedience 
C)  fiduciary 
D)  diligence 
A)  accounting 
B)  obedience 
C)  fiduciary 
D)  diligence

Question 4

An agent hired to buy gems for his principal can buy a diamond to give to his wife only if he asks his principal first;otherwise,he has breached his fiduciary duty.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not an agent of the business?

Accepted Answer

A)  An officer of a corporation 
B)  A person hired by a sole proprietor to make purchases of business supplies and materials 
C)  A member of a limited liability company 
D)  All of these are agents of the businesses. 
A)  An officer of a corporation 
B)  A person hired by a sole proprietor to make purchases of business supplies and materials 
C)  A member of a limited liability company 
D)  All of these are agents of the businesses.

Question 6

The fiduciary duty of an agent has a bearing upon his ability to act on behalf of a competitor of his principal.

Accepted Answer

A) True 
 B)False

Question 7

A gratuitous agent:

Accepted Answer

A)  is a paid agent. 
B)  is subject to the same duty of loyalty as other agents. 
C)  has no duty of diligence. 
D)  need not be reimbursed for her expenses. 
A)  is a paid agent. 
B)  is subject to the same duty of loyalty as other agents. 
C)  has no duty of diligence. 
D)  need not be reimbursed for her expenses.

Question 8

Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained.Edward sells the goods in a market that is glutted and obtains a low price,even though he could have obtained a higher price in a nearby market by using more care in obtaining the available market information.Edward is liable to Diane for breach of the duty of diligence.

Accepted Answer

A) True 
 B)False

Question 9

Stefan is a manufacturer's representative for Celmeed Corporation.One day he receives a 52" television as a gift from one of the clients he contacts on behalf of Celmeed.In this case:

Accepted Answer

A)  Stefan must account to Celmeed for the gift he has received. 
B)  the television belongs to Celmeed rather than to Stefan. 
C)  if Stefan keeps the television without telling Celmeed,he will have breached his fiduciary duty to Celmeed. 
D)  All of these are correct. 
A)  Stefan must account to Celmeed for the gift he has received. 
B)  the television belongs to Celmeed rather than to Stefan. 
C)  if Stefan keeps the television without telling Celmeed,he will have breached his fiduciary duty to Celmeed. 
D)  All of these are correct.

Question 10

Factors in determining whether a person acting for another is an employee or an independent contractor include the kind of occupation,the skill required,which party supplies the tools,and whether payment is by the job or by time worked.

Accepted Answer

A) True 
 B)False

Question 11

"Electronic agents" are not considered agents despite their name.

Accepted Answer

A) True 
 B)False

Question 12

Since the capacity to be a principal depends upon the capacity of the principal to do the act himself,a person cannot appoint an agent to act for him in the case that he subsequently loses mental capacity.

Accepted Answer

A) True 
 B)False

Question 13

An attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction.

Accepted Answer

A) True 
 B)False

Question 14

The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

Accepted Answer

A) True 
 B)False

Exam 19: Relationship of Principal and Agent

An agent is not required to keep which of the following information confidential?

Because the authority given to an agent by a principal is strictly personal,the agent's death terminates the agency.

The duty of ____ requires the agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions and directions given by the principal.

An agent hired to buy gems for his principal can buy a diamond to give to his wife only if he asks his principal first;otherwise,he has breached his fiduciary duty.

Which of the following is not an agent of the business?

The fiduciary duty of an agent has a bearing upon his ability to act on behalf of a competitor of his principal.

A gratuitous agent:

Stefan is a manufacturer's representative for Celmeed Corporation.One day he receives a 52" television as a gift from one of the clients he contacts on behalf of Celmeed.In this case:

Factors in determining whether a person acting for another is an employee or an independent contractor include the kind of occupation,the skill required,which party supplies the tools,and whether payment is by the job or by time worked.

"Electronic agents" are not considered agents despite their name.

Since the capacity to be a principal depends upon the capacity of the principal to do the act himself,a person cannot appoint an agent to act for him in the case that he subsequently loses mental capacity.

An attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction.

The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

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 With Third Parties

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

Legal Topics in Property Ownership and Management

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