Question 1

The maxim "Qui facit per alium, facit per se" accurately describes the relationship between an independent contractor and the one who hired him or her.

Accepted Answer

A) True 
 B)False

Question 2

Jason may validly authorize Nathan to:

Accepted Answer

A)  obtain title to Max's car by making materially false representations of an existing fact. 
B)  vote in his place since Jason is not feeling well on election day. 
C)  negotiate a contract for the sale of Jason's boat. 
D)  All of these. 
A)  obtain title to Max's car by making materially false representations of an existing fact. 
B)  vote in his place since Jason is not feeling well on election day. 
C)  negotiate a contract for the sale of Jason's boat. 
D)  All of these.

Question 3

Identify the following relationships and parties.
a.Patricia hires Andrew, an attorney, to negotiate a contract to purchase some property. She agrees to pay him $75 an hour for his services, and he agrees to use his own office and secretarial staff to negotiate and draft the agreement.
b.Mel owns a retail store. He hires Sarah to work for him as a salesclerk in the home furnishings department.
c.Carl is the general contractor for the construction of a large office complex. Carl hires Ed's Electric Company to do all of the wiring for the building.
d.Invox Corporation hires Gary as an outside salesman and instructs him to call on customers in a specified territory and to solicit orders for their products.
e.Marlin, who is the owner of Marlin's Department Store, hires Melissa as the general manager of his new branch in the Hillridge Mall.

Accepted Answer

a. Patricia is a principal, and Andrew i

Question 4

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 5

Mark hires Joe's real estate agency to sell his estate, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then Mark wins the three million-dollar lottery! Joe reads this in the newspaper and that afternoon makes a contract with Sharon to sell the estate. Is the contract valid?

Accepted Answer

A)  No, the agency terminated because of the change in conditions. 
B)  No, the agent has no right to sell without consent. 
C)  Yes, Mark would have to notify Joe if he wanted to stop the sale. 
D)  Yes, Joe had apparent authority to sell. 
A)  No, the agency terminated because of the change in conditions. 
B)  No, the agent has no right to sell without consent. 
C)  Yes, Mark would have to notify Joe if he wanted to stop the sale. 
D)  Yes, Joe had apparent authority to sell.

Question 6

43. 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 7

An agency contract appointing the agent for a period of more than one year does not have to be in writing.

Accepted Answer

A) True 
 B)False

Question 8

Milton owns a business delivering coffee and donuts within the downtown area of the city. Smith Co. calls him to deliver a large quantity of his products to their local office. While taking a coffee urn through the Smith Co.'s office, Milton drops it on Lester, scalding him. Who is liable?

Accepted Answer

A)  Smith Co. and Milton are liable 
B)  Milton alone is liable 
C)  Lester has to absorb the cost himself since he assumed the risk by working at Smith Co 
D)  Smith Co. alone is liable 
A)  Smith Co. and Milton are liable 
B)  Milton alone is liable 
C)  Lester has to absorb the cost himself since he assumed the risk by working at Smith Co 
D)  Smith Co. alone is liable

Question 9

In circumstances under which a person is held liable as a principal even though no actual agency has been created, there is a(n):

Accepted Answer

A)  agency by estoppel. 
B)  apparent agency. 
C)  ostensible agency. 
D)  All of these. 
A)  agency by estoppel. 
B)  apparent agency. 
C)  ostensible agency. 
D)  All of these.

Question 10

An agent, acting within the scope of authority granted by the principal, may bind the principal to contracts, but may not negotiate terms of the contracts.

Accepted Answer

A) True 
 B)False

Question 11

An agency agreement does not have to always be in writing.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a factor used to determine whether an agent is an employee or an independent contractor?

Accepted Answer

A)  Whether the employer or the employee/independent contractor designates the person and the tasks to be accomplished 
B)  Whether the principal is or is not in business 
C)  Whether payment is by the job or by the time worked 
D)  Whether the work is part of the regular business of the principal 
A)  Whether the employer or the employee/independent contractor designates the person and the tasks to be accomplished 
B)  Whether the principal is or is not in business 
C)  Whether payment is by the job or by the time worked 
D)  Whether the work is part of the regular business of the principal

Question 13

An agent has breached his fiduciary duty to the principal in which of the following situations?

Accepted Answer

A)  Where the agent competes with the principal 
B)  Where the agent makes a secret profit 
C)  Where the agent uses confidential information obtained in the course of the agency for his own benefit 
D)  All of these. 
A)  Where the agent competes with the principal 
B)  Where the agent makes a secret profit 
C)  Where the agent uses confidential information obtained in the course of the agency for his own benefit 
D)  All of these.

Question 14

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 15

What is an independent contractor? Can an independent contractor also be an agent? Explain.

Accepted Answer

a. change or because the subject matter

Question 16

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 17

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 18

Unless otherwise agreed, a power given as security may not be revoked.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Exam 19: Relationship of Principal and Agent

The maxim "Qui facit per alium, facit per se" accurately describes the relationship between an independent contractor and the one who hired him or her.

Jason may validly authorize Nathan to:

A gratuitous agent:

43. 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 agency contract appointing the agent for a period of more than one year does not have to be in writing.

Milton owns a business delivering coffee and donuts within the downtown area of the city. Smith Co. calls him to deliver a large quantity of his products to their local office. While taking a coffee urn through the Smith Co.'s office, Milton drops it on Lester, scalding him. Who is liable?

In circumstances under which a person is held liable as a principal even though no actual agency has been created, there is a(n):

An agent, acting within the scope of authority granted by the principal, may bind the principal to contracts, but may not negotiate terms of the contracts.

An agency agreement does not have to always be in writing.

Which of the following is not a factor used to determine whether an agent is an employee or an independent contractor?

An agent has breached his fiduciary duty to the principal in which of the following situations?

What is an independent contractor? Can an independent contractor also be an agent? Explain.

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

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

Unless otherwise agreed, a power given as security may not be revoked.

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.

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

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

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

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

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

Filters

₄₃_._Th_e_dut_y_of _require_s_th_e_agen_t_t_o_ac_t_i_n_th_e_principal'_s_affair_s_onl_y_a_s_authorize_d_b_y_th_e_principa_l_an_d_t_o_obe_y_all Reasonable instructions and directions given by the principal.