Question 1

Which of the following is an incorrect statement regarding the Foreign Corrupt Practices Act (FCPA) and U.S. agents abroad?

Accepted Answer

A)  The FCPA allows remuneration to lower-level foreign agents to expedite the handling of goods that U.S. businesses are seeking to sell in another country. 
B)  The FCPA allows remuneration to lower-level foreign officials to expedite the handling of goods that U.S. businesses are seeking to sell in another country. 
C)  The FCPA forbids payments to political officials beyond a certain level. 
D)  Companies are potentially liable for civil, but not criminal, sanctions for violating the FCPA. 
A)  The FCPA allows remuneration to lower-level foreign agents to expedite the handling of goods that U.S. businesses are seeking to sell in another country. 
B)  The FCPA allows remuneration to lower-level foreign officials to expedite the handling of goods that U.S. businesses are seeking to sell in another country. 
C)  The FCPA forbids payments to political officials beyond a certain level. 
D)  Companies are potentially liable for civil, but not criminal, sanctions for violating the FCPA. D

Question 2

Discuss the various types of agency relationships.

Accepted Answer

The various types of agency relationships include: a) principal-agent; b) employer- employee; and c) employer-independent contractor. In a principal-agent relationship, the principal gives the agent expressed or actual authority to act on the former's behalf. In an employer-employee relationship, an agent (the employee) who works for pay and is subject to the control of the principal (employer) may enter into contractual relationships on the latter's behalf. In an employer-independent contractor relationship, the agent (independent contractor) is hired by the principal (employer) to do a specific job but is not controlled with respect to physical conduct or the details of work performance.

Question 3

Which of the following statements is true of agency by estoppel?

Accepted Answer

A)  It determines an agent's authority based on customs, circumstances, and the facts of a situation. 
B)  If a third person is led by a principal to believe that a certain individual is the principal's agent, it grants an agent the authority to act. 
C)  It is formed when a third party is unaware of the existence of a principal. 
D)  It occurs when an unauthorized agent commits a principal to an agreement and the principal accepts the unauthorized agreement. 
A)  It determines an agent's authority based on customs, circumstances, and the facts of a situation. 
B)  If a third person is led by a principal to believe that a certain individual is the principal's agent, it grants an agent the authority to act. 
C)  It is formed when a third party is unaware of the existence of a principal. 
D)  It occurs when an unauthorized agent commits a principal to an agreement and the principal accepts the unauthorized agreement. B

Question 4

Which of the following statements is true of the duty of loyalty?

Accepted Answer

A)  It requires agents to live up to the standards of performance expected of people in their occupation. 
B)  It assigns an agent the duty to follow all reasonable and lawful instructions of a principal. 
C)  It requires agents to keep accurate books that can be viewed by principals. 
D)  It mandates that an agent act on behalf of one principal only to avoid conflicts of interest. 
A)  It requires agents to live up to the standards of performance expected of people in their occupation. 
B)  It assigns an agent the duty to follow all reasonable and lawful instructions of a principal. 
C)  It requires agents to keep accurate books that can be viewed by principals. 
D)  It mandates that an agent act on behalf of one principal only to avoid conflicts of interest.

Question 5

Arthur enters into a written contract with James that requires James to sell Arthur's farm. Arthur then hires Katherine to sell his farm without terminating the contract with James. Which of the following statements is true of this scenario?

Accepted Answer

A)  James can sue Arthur for monetary damages only if their contract was an exclusive agency contract. 
B)  James can sue Arthur for breach of contract on the grounds of duty of cooperation and ask for specific performance. 
C)  Arthur has the authority to enter into a contract with Katherine without terminating the contract with James. 
D)  If James has not completed the duties assigned to him in the contract, Arthur need not compensate James for his services. 
A)  James can sue Arthur for monetary damages only if their contract was an exclusive agency contract. 
B)  James can sue Arthur for breach of contract on the grounds of duty of cooperation and ask for specific performance. 
C)  Arthur has the authority to enter into a contract with Katherine without terminating the contract with James. 
D)  If James has not completed the duties assigned to him in the contract, Arthur need not compensate James for his services.

Question 6

How did companies use the differences between employer-employee relationships and employer-independent contractor relationships to reduce costs in the competitive business environment of the 1990s?

Accepted Answer

A common strategy in the highly competit

Question 7

Which of the following statements is true of e-agents?

Accepted Answer

A)  E-agents can only be used for tasks related to information gathering. 
B)  Using an e-agent to accept a click-on agreement is considered unlawful. 
C)  An e-agent's actions must be approved by a principal for it to bind the principal. 
D)  The Uniform Electronic Transaction Act (UET
A)  allows e-agents to bind principals. 
A)  E-agents can only be used for tasks related to information gathering. 
B)  Using an e-agent to accept a click-on agreement is considered unlawful. 
C)  An e-agent's actions must be approved by a principal for it to bind the principal. 
D)  The Uniform Electronic Transaction Act (UET
A)  allows e-agents to bind principals.

Question 8

Which of the following forms of agency relationships does a power of attorney document establish?

Accepted Answer

A)  agency by agreement 
B)  agency by implied authority 
C)  agency through ratification 
D)  agency by estoppel 
A)  agency by agreement 
B)  agency by implied authority 
C)  agency through ratification 
D)  agency by estoppel

Question 9

Which of the following is a condition for an agency by ratification to be effective?

Accepted Answer

A)  A principal must give prior authorization to an agent. 
B)  A principal should lead a third party to believe that an individual is his or her agent. 
C)  The existence of a principal must be clear to a third party at the time of an agent's unauthorized act. 
D)  An agent must carry an authorization letter that establishes that he or she is the principal's agent. 
A)  A principal must give prior authorization to an agent. 
B)  A principal should lead a third party to believe that an individual is his or her agent. 
C)  The existence of a principal must be clear to a third party at the time of an agent's unauthorized act. 
D)  An agent must carry an authorization letter that establishes that he or she is the principal's agent.

Question 10

In the European Union, to terminate a relationship of two years, a notice of two months is required.

Accepted Answer

A) True 
 B)False

Question 11

Agency by is an agency relationship in which the customs and circumstances, rather than a detailed formal agreement, determine the agent's authority.

Accepted Answer

A)  implied authority 
B)  expressed authority 
C)  estoppel 
D)  ratification 
A)  implied authority 
B)  expressed authority 
C)  estoppel 
D)  ratification

Question 12

Courts generally allow agents to do all but which of the following?

Accepted Answer

A)  receive payments of money due the principal 
B)  enter into contracts for incidentals 
C)  employ or discharge employees 
D)  enter into a contract for an illegal purpose, so long as the subject matter of the contract is legal 
A)  receive payments of money due the principal 
B)  enter into contracts for incidentals 
C)  employ or discharge employees 
D)  enter into a contract for an illegal purpose, so long as the subject matter of the contract is legal

Question 13

An agency relationship formed through oral agreement is also considered as an expressed agency.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an agency that is formed when an unauthorized act of an agent is accepted by the principal?

Accepted Answer

A)  expressed agency 
B)  agency by implied authority 
C)  agency through ratification 
D)  agency by estoppel 
A)  expressed agency 
B)  agency by implied authority 
C)  agency through ratification 
D)  agency by estoppel

Question 15

Which of the following is an incorrect statement regarding termination by agreement?

Accepted Answer

A)  The principal may decide to terminate the principal-agent relationship. 
B)  The agent may decide to terminate the principal-agent relationship. 
C)  When the principal-agent relationship is terminated by agreement, all third parties who dealt with the agent should be given actual notice by the principal. 
D)  When the principal-agent relationship is terminated by agreement, actual notice may be given to others through advertisements in newspapers published in areas where the agent operated on behalf of the principal. 
A)  The principal may decide to terminate the principal-agent relationship. 
B)  The agent may decide to terminate the principal-agent relationship. 
C)  When the principal-agent relationship is terminated by agreement, all third parties who dealt with the agent should be given actual notice by the principal. 
D)  When the principal-agent relationship is terminated by agreement, actual notice may be given to others through advertisements in newspapers published in areas where the agent operated on behalf of the principal.

Question 16

How is an agent's authority determined in an agency by implied authority? What do courts generally permit agents to do?

Accepted Answer

In agency by implied authority, customs,

Question 17

An indemnity is an obligation on the part of a principal to reimburse the agent against any losses incurred when the latter is acting on behalf of the former.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true about an independent contractor?

Accepted Answer

A)  An independent contractor is typically paid on a monthly basis. 
B)  An independent contractor typically works only for one employer. 
C)  An independent contractor's physical conduct or details of work performance are not controlled by the employer. 
D)  An independent contractor uses only the tools supplied by the contracting party. 
A)  An independent contractor is typically paid on a monthly basis. 
B)  An independent contractor typically works only for one employer. 
C)  An independent contractor's physical conduct or details of work performance are not controlled by the employer. 
D)  An independent contractor uses only the tools supplied by the contracting party.

Question 19

Which of the following is an incorrect statement regarding the employer-independent contractor relationship?

Accepted Answer

A)  For independent contractors, employers are normally required to withhold Social Security amounts. 
B)  Employers are not usually liable for the torts committed by their independent contractors. 
C)  When called on to distinguish between an employee and an independent contractor, courts scrutinize the degree of control the employer has over the agent. 
D)  To escape paying unemployment insurance taxes as well as medical benefits, many employers in recent years have classified their workers as independent contractors or part-time workers. 
A)  For independent contractors, employers are normally required to withhold Social Security amounts. 
B)  Employers are not usually liable for the torts committed by their independent contractors. 
C)  When called on to distinguish between an employee and an independent contractor, courts scrutinize the degree of control the employer has over the agent. 
D)  To escape paying unemployment insurance taxes as well as medical benefits, many employers in recent years have classified their workers as independent contractors or part-time workers.

Question 20

Which of the following statements is true about termination by agreement?

Accepted Answer

A)  A principal should give constructive notice to all third parties who dealt with an agent. 
B)  When an agency relationship is terminated by an agent, the agent must give actual notice to all third parties who dealt with the agent. 
C)  When an agency relationship is terminated by a lapse of time, there is no requirement to give notification to third parties. 
D)  Constructive notice may be given to others through advertisement in newspapers published in areas where an agent operated on behalf of a principal. 
A)  A principal should give constructive notice to all third parties who dealt with an agent. 
B)  When an agency relationship is terminated by an agent, the agent must give actual notice to all third parties who dealt with the agent. 
C)  When an agency relationship is terminated by a lapse of time, there is no requirement to give notification to third parties. 
D)  Constructive notice may be given to others through advertisement in newspapers published in areas where an agent operated on behalf of a principal.

Exam 15: Agency Law

Which of the following is an incorrect statement regarding the Foreign Corrupt Practices Act (FCPA) and U.S. agents abroad?

Discuss the various types of agency relationships.

Which of the following statements is true of agency by estoppel?

Which of the following statements is true of the duty of loyalty?

Arthur enters into a written contract with James that requires James to sell Arthur's farm. Arthur then hires Katherine to sell his farm without terminating the contract with James. Which of the following statements is true of this scenario?

How did companies use the differences between employer-employee relationships and employer-independent contractor relationships to reduce costs in the competitive business environment of the 1990s?

Which of the following statements is true of e-agents?

Which of the following forms of agency relationships does a power of attorney document establish?

Which of the following is a condition for an agency by ratification to be effective?

In the European Union, to terminate a relationship of two years, a notice of two months is required.

Agency by is an agency relationship in which the customs and circumstances, rather than a detailed formal agreement, determine the agent's authority.

Courts generally allow agents to do all but which of the following?

An agency relationship formed through oral agreement is also considered as an expressed agency.

Which of the following is an agency that is formed when an unauthorized act of an agent is accepted by the principal?

Which of the following is an incorrect statement regarding termination by agreement?

How is an agent's authority determined in an agency by implied authority? What do courts generally permit agents to do?

An indemnity is an obligation on the part of a principal to reimburse the agent against any losses incurred when the latter is acting on behalf of the former.

Which of the following statements is true about an independent contractor?

Which of the following is an incorrect statement regarding the employer-independent contractor relationship?

Which of the following statements is true about termination by agreement?

Critical Thinking and Legal Reasoning

Introduction to Law and the Legal Environment of Business

The American Legal System

Alternative Tools of Dispute Resolution

Constitutional Principles

White-Collar Crime and the Business Community

Ethics, Social Responsibility, and the Business Manager

The International Legal Environment of Business

The Law of Contracts and Sales I

The Law of Contracts and Sales Ii

The Law of Torts

Product and Service Liability Law

Law of Property: Real and Personal

Intellectual Property

Law and Business Associations I

Law and Business Associations II

The Law of Administrative Agencies

The Employment Relationship and Immigration Laws

Laws Governing Labor-Management Relations

Employment Discrimination

Environmental Law

Rules Governing the Issuance and Trading of Securities

Antitrust Laws

Laws of Debtor-Creditor Relations and Consumer Protection

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