Question 1

How will a power of attorney operate if it states that the occurrence of a specific event will make it operational?

Accepted Answer

A)  as a variation of a general power of attorney 
B)  as a variation of an enduring power of attorney 
C)  as a variation of a springing power of attorney 
D)  as a variation of a specific power of attorney 
A)  as a variation of a general power of attorney 
B)  as a variation of an enduring power of attorney 
C)  as a variation of a springing power of attorney 
D)  as a variation of a specific power of attorney B

Question 2

From which of the following does a third party typically derive an agent's ostensible authority?

Accepted Answer

A)  the conduct of the principal 
B)  reasonable inference of usual authority 
C)  an expression of the limitations of authority 
D)  inferring typical authority 
A)  the conduct of the principal 
B)  reasonable inference of usual authority 
C)  an expression of the limitations of authority 
D)  inferring typical authority A

Question 3

Jack sent a cover letter with his new purchasing agent,Kuan Huo,advising suppliers of Kuan's authority to transact purchases under $33 000.How would a court considering a dispute in which a plaintiff alleges Kuan had apparent authority to enter into a $42 000 purchase contract most likely resolve this dispute?

Accepted Answer

A)  Deny the third party's claim based on the principal's stated limitation. 
B)  Deny the second-party claim because the agent's limited authority was reasonably known. 
C)  Deny a first-party claim on the grounds it ought to have known of the reasonable limitation. 
D)  Deny the outsider's claim based on the agent's unenduring authority. 
A)  Deny the third party's claim based on the principal's stated limitation. 
B)  Deny the second-party claim because the agent's limited authority was reasonably known. 
C)  Deny a first-party claim on the grounds it ought to have known of the reasonable limitation. 
D)  Deny the outsider's claim based on the agent's unenduring authority. A

Question 4

The employment contract of a manager of a business expressly recites her authority.How do other components of her authority come into existence?

Accepted Answer

A)  via the more tangible form of a detailed job description 
B)  by conducting a fact-specific inquiry of the position's job description 
C)  via the nature of the position and business management requirements 
D)  by the strict utterance of instructions to the manager 
A)  via the more tangible form of a detailed job description 
B)  by conducting a fact-specific inquiry of the position's job description 
C)  via the nature of the position and business management requirements 
D)  by the strict utterance of instructions to the manager

Question 5

What approach would a court most likely take to determine the type of authority an agent has?

Accepted Answer

A)  an inherently flexible inquiry 
B)  a fact-specific inquiry 
C)  a broad informal inquiry 
D)  a narrow informal inquiry 
A)  an inherently flexible inquiry 
B)  a fact-specific inquiry 
C)  a broad informal inquiry 
D)  a narrow informal inquiry

Question 6

The onus is on outsiders to inquire as to the limits of an agent's authority.

Accepted Answer

A) True 
 B)False

Question 7

When an agent acts within the scope of the agent's authority,the principal is bound by the contract,whether the principal likes it or not.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a distinguishing characteristic of the implied authority of an agent?

Accepted Answer

A)  It may be intuitively deduced by the agent's position. 
B)  It typically takes the form of an informal power of attorney. 
C)  It is customarily limited to a short time period. 
D)  It is inherently inflexible and narrowly defined. 
A)  It may be intuitively deduced by the agent's position. 
B)  It typically takes the form of an informal power of attorney. 
C)  It is customarily limited to a short time period. 
D)  It is inherently inflexible and narrowly defined.

Question 9

Which of the following requires formal recognition with respect to an actionable claim arising from an alleged agency relationship?

Accepted Answer

A)  a wide array of transactions 
B)  the cornerstone of a business 
C)  a delegation of authority 
D)  the commonality of occurrence 
A)  a wide array of transactions 
B)  the cornerstone of a business 
C)  a delegation of authority 
D)  the commonality of occurrence

Question 10

Which of the following terms is synonymous with "apparent authority"?

Accepted Answer

A)  actual authority 
B)  implied authority 
C)  ostensible authority 
D)  agency by estoppel 
A)  actual authority 
B)  implied authority 
C)  ostensible authority 
D)  agency by estoppel

Question 11

Why do agency relationships,in general,operate with few difficulties?

Accepted Answer

A)  Agents simply represent principals in transactions with others. 
B)  Engaging external specialists is a cornerstone of business. 
C)  Businesspeople cannot operate their businesses alone. 
D)  Parties use agents instead of dealing face to face. 
A)  Agents simply represent principals in transactions with others. 
B)  Engaging external specialists is a cornerstone of business. 
C)  Businesspeople cannot operate their businesses alone. 
D)  Parties use agents instead of dealing face to face.

Question 12

There is an absolute prohibition against acting for two principals simultaneously.

Accepted Answer

A) True 
 B)False

Question 13

Identify each type of agency authority and describe what is required of the principal in each instance.

Accepted Answer

Actual authority exists when a principal

Question 14

Sherif is the general manager of a clothing store.His authority to hire an electrician to repair a faulty light in the store would likely arise from which of the following?

Accepted Answer

A)  personal care power 
B)  his implied authority 
C)  his fiduciary duty 
D)  his legal authority 
A)  personal care power 
B)  his implied authority 
C)  his fiduciary duty 
D)  his legal authority

Question 15

Identify and briefly describe the implied power a general manager of a hockey team presumably would have.Contrast the hockey team general manager's implied power with that presumably given to a manager of a convenience store.

Accepted Answer

A general manager of a hockey team would

Question 16

Which of the following employees is mostly likely an agent on behalf of their employer?

Accepted Answer

A)  custodian 
B)  sales clerk 
C)  typist 
D)  maintenance worker 
A)  custodian 
B)  sales clerk 
C)  typist 
D)  maintenance worker

Question 17

Which of the following is a distinguishing feature of fiduciary duties?

Accepted Answer

A)  They only arise in agency relationships. 
B)  They only arise in cases of power imbalance. 
C)  They arise in many business relationships. 
D)  They arise in all employment relationships. 
A)  They only arise in agency relationships. 
B)  They only arise in cases of power imbalance. 
C)  They arise in many business relationships. 
D)  They arise in all employment relationships.

Question 18

An agency relationship created when the principal acts such that third parties reasonably conclude that an agency relationship exists is legally described as an agency by ratification.

Accepted Answer

A) True 
 B)False

Question 19

Although Geraldine's job title at a local car dealership is "sales director," in reality,all car deals must be approved by the dealership's owner.One day,Geraldine exceeded her authority and approved a sales contract when the owner was away.Why might the contract be binding on the dealership?

Accepted Answer

A)  because she was acting with apparent authority 
B)  because she was an agent of necessity 
C)  because she is an employee of the car dealership 
D)  because she had actual authority 
A)  because she was acting with apparent authority 
B)  because she was an agent of necessity 
C)  because she is an employee of the car dealership 
D)  because she had actual authority

Question 20

Identify the circumstances under which a principal would be permitted,by law,to ratify a contract.

Accepted Answer

The law permits a principal to ratify a

Exam 13: The Agency Relationship

How will a power of attorney operate if it states that the occurrence of a specific event will make it operational?

From which of the following does a third party typically derive an agent's ostensible authority?

The employment contract of a manager of a business expressly recites her authority.How do other components of her authority come into existence?

What approach would a court most likely take to determine the type of authority an agent has?

The onus is on outsiders to inquire as to the limits of an agent's authority.

When an agent acts within the scope of the agent's authority,the principal is bound by the contract,whether the principal likes it or not.

Which of the following is a distinguishing characteristic of the implied authority of an agent?

Which of the following requires formal recognition with respect to an actionable claim arising from an alleged agency relationship?

Which of the following terms is synonymous with "apparent authority"?

Why do agency relationships,in general,operate with few difficulties?

There is an absolute prohibition against acting for two principals simultaneously.

Identify each type of agency authority and describe what is required of the principal in each instance.

Sherif is the general manager of a clothing store.His authority to hire an electrician to repair a faulty light in the store would likely arise from which of the following?

Identify and briefly describe the implied power a general manager of a hockey team presumably would have.Contrast the hockey team general manager's implied power with that presumably given to a manager of a convenience store.

Which of the following employees is mostly likely an agent on behalf of their employer?

Which of the following is a distinguishing feature of fiduciary duties?

An agency relationship created when the principal acts such that third parties reasonably conclude that an agency relationship exists is legally described as an agency by ratification.

Although Geraldine's job title at a local car dealership is "sales director," in reality,all car deals must be approved by the dealership's owner.One day,Geraldine exceeded her authority and approved a sales contract when the owner was away.Why might the contract be binding on the dealership?

Identify the circumstances under which a principal would be permitted,by law,to ratify a contract.

Knowledge of Law As a Business Asset

The Canadian Legal System

Managing Legal Risks

Dispute Resolution

An Introduction to Contracts

Forming Contractual Relationships

The Terms of a Contract

Non-Enforcement of Contracts

Termination and Enforcement of Contracts

Introduction to Tort Law

The Tort of Negligence

Other Torts

Business Forms and Arrangements

The Corporate Form: Organizational Matters

The Corporate Form: Operational Matters

Introduction to Property Law

Intellectual Property

Real Property

The Employment Relationship

Terminating the Employment Relationship

Professional Services

The Sale of Goods

Consumer Protection and Competition Law

Business and Banking

The Legal Aspects of Credit

Bankruptcy and Insolvency

Insurance

Filters