Exam 24: Principal-Agent Relationship

To prevent problems, a principal-agent contract should be in writing.

An agency is created if one person ratifies another's unauthorized act.

Of the following, the one that is not a duty owed by a principal to an agent is

Platt inherited $50,000. She hired an agent and gave the agent specific instructions to invest the money in land. Instead, the agent invested the money in stock, thinking that Platt would get a better return on her money. Is the agent entitled to compensation?

A broker is an example of

A minor can act as either a principal or an agent.

If you hire an agent to sell your house, the agency ends when the house is sold.

A contract by a minor appointing an agent is ____________________.

The bankruptcy of the agent may terminate the agency relationship.

When an agency is terminated by the bankruptcy of the principal, it is known as termination by ____________________.

Of the following acts, the one that an agent could not perform for a principal is

A(n) ____________________ agent is one who does not receive compensation.

An emergency may create a principal-agent relationship by necessity.

The major difference between an employee and an independent contractor is the length of time during which services will be performed.

To be valid, an agency agreement must be in writing.

A(n) ____________________ agent has the authority to perform acts that relate to all business affairs of the principal.

Clinton appointed DeWitt, a minor, to sell some of his lumber to Broward. Broward signed a contract with DeWitt to purchase the lumber but then refused to go through with the deal when he learned that DeWitt was a minor. May Broward refuse to go through with the transaction?

A written document appointing an agent is a

Of the following duties, the only one that an agent does not owe the principal is

A(n) ____________________ is a person hired to do a specific job but not subject to the direction or control of the hirer.