Question 1

When is an agency relationship irrevocable?

Accepted Answer

A) It is never irrevocable. 
B) When the agency is coupled with an interest of the agent in the subject matter 
C) When the principal violates his duties to the agent 
D) When the agency is gratuitous 
A) It is never irrevocable. 
B) When the agency is coupled with an interest of the agent in the subject matter 
C) When the principal violates his duties to the agent 
D) When the agency is gratuitous

Question 2

A principal owes to any agent the same duties under tort law that the principal owes to all parties.

Accepted Answer

A) True 
 B)False

Question 3

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 4

As a general rule, a person may do through an agent whatever business activity he may accomplish personally.

Accepted Answer

A) True 
 B)False

Question 5

Mary employs Tony to purchase for her a suitable site for an office complex.Tony owns a suitable site himself and sells it to Mary for the fair market value without disclosing to her that he is the owner of the land.Tony has fulfilled his duties to Mary, because he sold the property for the fair market value, even if he failed to disclose his ownership of the property.

Accepted Answer

A) True 
 B)False

Question 6

In a partnership, each partner is an agent of the partnership.

Accepted Answer

A) True 
 B)False

Question 7

According to the Second Restatement, in which of the following situations would an agency be terminated by operation of law?

Accepted Answer

A) An outbreak of war places the principal and agent in the position of alien enemies. 
B) The death of the individual principal, only upon the agent's notice of the death. 
C) The agent gives notice to the principal that she is renouncing the authority given to her. 
D) None of these. 
A) An outbreak of war places the principal and agent in the position of alien enemies. 
B) The death of the individual principal, only upon the agent's notice of the death. 
C) The agent gives notice to the principal that she is renouncing the authority given to her. 
D) None of these.

Question 8

Steven is a manufacturer's representative for Sellmed Corporation.One day he receives a big-screen television as a gift from one of the clients he contacts on behalf of Sellmed.In this case:

Accepted Answer

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

Question 9

The appointment of an agent by a minor or an incompetent not under a guardianship and any resulting contracts are not voidable regardless of the agent's contractual capacity.

Accepted Answer

A) True 
 B)False

Question 10

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 11

A plumber hired to redo the plumbing in a building is an independent contractor and agent of the owner of the building.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Jones, an agent of Rossi, is authorized to sell Rossi's ownership of wheat on the commodities market on Monday.On Monday, however, the market opens with the lowest prices for wheat in two decades.Jones must go ahead and sell Rossi's wheat on Monday.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Agency relationships are governed primarily by federal statute.

Accepted Answer

A) True 
 B)False

Question 16

A person who engages an independent contractor may control the method and manner used by the contractor to perform the job.

Accepted Answer

A) True 
 B)False

Question 17

An agency will terminate on the occurrence of all but which one of the following?

Accepted Answer

A) The goal of the agency is accomplished. 
B) The agent decides to quit. 
C) The subject matter of the agency is destroyed. 
D) The principal leaves the country. 
A) The goal of the agency is accomplished. 
B) The agent decides to quit. 
C) The subject matter of the agency is destroyed. 
D) The principal leaves the country.

Question 18

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 19

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 20

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

Accepted Answer

A) True 
 B)False

Exam 19: Relationship of Principal and Agent

When is an agency relationship irrevocable?

A principal owes to any agent the same duties under tort law that the principal owes to all parties.

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

As a general rule, a person may do through an agent whatever business activity he may accomplish personally.

In a partnership, each partner is an agent of the partnership.

According to the Second Restatement, in which of the following situations would an agency be terminated by operation of law?

Steven is a manufacturer's representative for Sellmed Corporation.One day he receives a big-screen television as a gift from one of the clients he contacts on behalf of Sellmed.In this case:

The appointment of an agent by a minor or an incompetent not under a guardianship and any resulting contracts are not voidable regardless of the agent's contractual capacity.

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.

A plumber hired to redo the plumbing in a building is an independent contractor and agent of the owner of the building.

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

Jones, an agent of Rossi, is authorized to sell Rossi's ownership of wheat on the commodities market on Monday.On Monday, however, the market opens with the lowest prices for wheat in two decades.Jones must go ahead and sell Rossi's wheat on Monday.

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.

Agency relationships are governed primarily by federal statute.

A person who engages an independent contractor may control the method and manner used by the contractor to perform the job.

An agency will terminate on the occurrence of all but which one of the following?

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

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

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

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

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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