Question 1

The Latin phrase ________ means to "let the superior speak."

Accepted Answer

A)  superior repondeat 
B)  e pluribis unum 
C)  In pari delicto 
D)  respondeat superior 
E)  pact sunt servende 
A)  superior repondeat 
B)  e pluribis unum 
C)  In pari delicto 
D)  respondeat superior 
E)  pact sunt servende

Question 2

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?

Accepted Answer

A)  The defendant was not held liable because it had no reason to know a former employee was stealing from its clients. 
B)  The defendant was not held liable because the former employee's act exceeded the scope of his employment. 
C)  The defendant was not held liable because the plaintiff should have known the employee was no longer employed by the defendant. 
D)  The defendant was held strictly liable because the nature of the acts involved were inherently dangerous. 
E)  The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated. 
A)  The defendant was not held liable because it had no reason to know a former employee was stealing from its clients. 
B)  The defendant was not held liable because the former employee's act exceeded the scope of his employment. 
C)  The defendant was not held liable because the plaintiff should have known the employee was no longer employed by the defendant. 
D)  The defendant was held strictly liable because the nature of the acts involved were inherently dangerous. 
E)  The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated.

Question 3

If a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal, which of the following is true?

Accepted Answer

A)  The agent remains liable to the third party. 
B)  The agent remains liable to the third party unless the dispute involves an amount less than $1,000 in which case the agent is released. 
C)  The agent remains liable to the third party unless the dispute involves an amount less than $500 in which case the agent is released. 
D)  The agent is released from liability to the third party. 
E)  The agent is released from liability to the third party unless the principal resides in another state and has not paid the judgment within 30 days from when it was rendered. 
A)  The agent remains liable to the third party. 
B)  The agent remains liable to the third party unless the dispute involves an amount less than $1,000 in which case the agent is released. 
C)  The agent remains liable to the third party unless the dispute involves an amount less than $500 in which case the agent is released. 
D)  The agent is released from liability to the third party. 
E)  The agent is released from liability to the third party unless the principal resides in another state and has not paid the judgment within 30 days from when it was rendered.

Question 4

Arun was leaving the country and gave his co-worker Jerome a power of attorney. This is a special type of express agent authority.

Accepted Answer

A) True 
 B)False

Question 5

Which statement is false regarding termination of agency based on operation of law?

Accepted Answer

A)  Impossibility of performance terminates the agency relationship. 
B)  An agency agreement is terminated whenever the agent, unknown to the principal, acquires an interest against the principal's interest. 
C)  The agency agreement is terminated if the agent breaches the duty of loyalty he or she has to the principal. 
D)  A change in law passed subsequent to the formation of an agency agreement may not result in termination of the agency agreement. 
E)  If there is an unusual change in circumstances that leads the agent to believe that the principal's instructions do not apply, the agency relationship terminates. 
A)  Impossibility of performance terminates the agency relationship. 
B)  An agency agreement is terminated whenever the agent, unknown to the principal, acquires an interest against the principal's interest. 
C)  The agency agreement is terminated if the agent breaches the duty of loyalty he or she has to the principal. 
D)  A change in law passed subsequent to the formation of an agency agreement may not result in termination of the agency agreement. 
E)  If there is an unusual change in circumstances that leads the agent to believe that the principal's instructions do not apply, the agency relationship terminates.

Question 6

Which country is partially influenced by classical Islamic law and suggests that under respondeat superior those who cause harm should repair it?

Accepted Answer

A)  Iraq 
B)  Iran 
C)  Afghanistan 
D)  England 
E)  France 
A)  Iraq 
B)  Iran 
C)  Afghanistan 
D)  England 
E)  France

Question 7

The text discussed the case of Dunkley v. S. Coraluzzo Petroleum Transporters, where the New Jersey Appellate Court addressed an employer's liability for the harassing conduct of its supervisor. Which of the following was the result?

Accepted Answer

A)  The employer was not vicariously liable because it maintained a handbook of anti-discrimination policies and complaint methods, provided it to employees upon hire and directed them to become familiar with the information provided, and took steps to prevent plaintiff from further harassment. 
B)  The employer was not vicariously liable because it fired the supervisor. 
C)  The plaintiff was successful because the employer did not have any policies in place to prevent the harassment that occurred and the employer did not take steps to prevent the harassment once it became aware. 
D)  The plaintiff was successful because the employer could not prove its employees were aware or should have been aware of its policies. 
E)  The plaintiff was successful because the employer admitted it knew the supervisor harassed the plaintiff but failed to take action. 
A)  The employer was not vicariously liable because it maintained a handbook of anti-discrimination policies and complaint methods, provided it to employees upon hire and directed them to become familiar with the information provided, and took steps to prevent plaintiff from further harassment. 
B)  The employer was not vicariously liable because it fired the supervisor. 
C)  The plaintiff was successful because the employer did not have any policies in place to prevent the harassment that occurred and the employer did not take steps to prevent the harassment once it became aware. 
D)  The plaintiff was successful because the employer could not prove its employees were aware or should have been aware of its policies. 
E)  The plaintiff was successful because the employer admitted it knew the supervisor harassed the plaintiff but failed to take action.

Question 8

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee?

Accepted Answer

A)  The employer has no right to receive any reimbursement from the negligent employee. 
B)  The employer has a right to recover only 50% of any amounts paid from a negligent employee. 
C)  The employer has a right to recover all amounts paid from the negligent employee. 
D)  The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
E)  The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
A)  The employer has no right to receive any reimbursement from the negligent employee. 
B)  The employer has a right to recover only 50% of any amounts paid from a negligent employee. 
C)  The employer has a right to recover all amounts paid from the negligent employee. 
D)  The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
E)  The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute.

Question 9

What type of principal exists when his or her identity is not known but the third party is aware that the agent is making an agreement on behalf of the principal?

Accepted Answer

A)  Partially disclosed principal 
B)  Identified principal 
C)  Disclosed principal 
D)  Partially identified principal 
E)  Undisclosed principal 
A)  Partially disclosed principal 
B)  Identified principal 
C)  Disclosed principal 
D)  Partially identified principal 
E)  Undisclosed principal

Question 10

[Textbook Confusion] Jason needs a business law book. He hears that Gwen has one for sale. Jason asks his girlfriend Sakura to buy it for him from Gwen if Sakura can get it for under $40. Sakura sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Sakura does not mention that the book is for Jason, although all the parties were on good terms, and the identity of the buyer should not have affected Sakura's agreement. Later, however, Rima agrees to give Jason her used business law book. Jason tells Sakura that he no longer wants the book. Sakura tells Gwen about the situation with Jason. Gwen replies that she does not care if Jason wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Jason - she doesn't care who pays.
-Which of the following is true regarding whether Sakura is personally bound on the contract with Gwen?

Accepted Answer

A)  Sakura is not personally bound because she was acting on behalf of Jason. 
B)  Sakura is personally bound unless she can establish that Gwen would not have sold her the book if she had known that Jason was involved. 
C)  Sakura is personally bound unless she can establish that Jason has the funds with which to pay Gwen. 
D)  Sakura is not personally bound unless Jason is legally insolvent. 
E)  Sakura is personally bound. 
A)  Sakura is not personally bound because she was acting on behalf of Jason. 
B)  Sakura is personally bound unless she can establish that Gwen would not have sold her the book if she had known that Jason was involved. 
C)  Sakura is personally bound unless she can establish that Jason has the funds with which to pay Gwen. 
D)  Sakura is not personally bound unless Jason is legally insolvent. 
E)  Sakura is personally bound.

Question 11

Pelley gives Jorge a durable power of attorney, this gives Pelley what?

Accepted Answer

A)  authority to continue beyond a principal's incapacitation 
B)  power of attorney only after Pelley files a bond 
C)  authority to access bank accounts only 
D)  authority to buy and sell real estate only 
E)  the ability to file Jorge's taxes 
A)  authority to continue beyond a principal's incapacitation 
B)  power of attorney only after Pelley files a bond 
C)  authority to access bank accounts only 
D)  authority to buy and sell real estate only 
E)  the ability to file Jorge's taxes

Question 12

The principal may terminate an agency coupled with an interest.

Accepted Answer

A) True 
 B)False

Question 13

If an agent is acting within his or her authority on a contract involving an undisclosed principal, the agent is ________.

Accepted Answer

A)  liable for the agreement if it is under $5,000. 
B)  not liable at all for the contract. 
C)  Liable for the agreement. 
D)  will split the contract remedy between he principle and agent. 
E)  will only hold the principal liable. 
A)  liable for the agreement if it is under $5,000. 
B)  not liable at all for the contract. 
C)  Liable for the agreement. 
D)  will split the contract remedy between he principle and agent. 
E)  will only hold the principal liable.

Question 14

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Accepted Answer

A)  At any time a principal can revoke an agent's authority. 
B)  A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages. 
C)  An agent can terminate the agency relationship by renouncing the authority given to the agent. 
D)  An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages. 
E)  If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages. 
A)  At any time a principal can revoke an agent's authority. 
B)  A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages. 
C)  An agent can terminate the agency relationship by renouncing the authority given to the agent. 
D)  An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages. 
E)  If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages.

Question 15

Which of the following is false regarding termination of agency in the Netherlands?

Accepted Answer

A)  The agent is entitled to compensation if his or her duties are concluded within a reasonable time after termination. 
B)  Compensation is due if the agent received the orders for a certain action before the termination of the contract. 
C)  The agent is entitled to goodwill compensation in certain situations. 
D)  An agent is not entitled to additional compensation based on bringing the principal new customers or because agreements with clients obtained by the agent remain profitable. 
E)  There are requirements on the agent in regard to time limits in filing for certain compensation. 
A)  The agent is entitled to compensation if his or her duties are concluded within a reasonable time after termination. 
B)  Compensation is due if the agent received the orders for a certain action before the termination of the contract. 
C)  The agent is entitled to goodwill compensation in certain situations. 
D)  An agent is not entitled to additional compensation based on bringing the principal new customers or because agreements with clients obtained by the agent remain profitable. 
E)  There are requirements on the agent in regard to time limits in filing for certain compensation.

Question 16

[Club Security] Trevor works security at Night Club and often has to escort rowdy patrons outside of the club. One night Trevor was called to separate a fight that started between Zack and Pat. When Trevor approached the fight, he saw Zack on top of Pat, punching him repeatedly. Trevor approached Zack and yelled, "Stop!" and "Security!" Zack would not stop punching Pat. Trevor removed Zack from Pat and tried to restrain him as he was thrashing around the bar. Zack head-butted Trevor in attempt to get away, causing Trevor to fallback. When Trevor stood back up, he threw a chair toward Zack but hit Pat on accident, resulting in a broken leg. Trevor then observed Zack attempting to fight with other customers and tried to take him down by jumping on his back. Zack was injured and suffered a pelvic fracture. Trevor received help from other bar patrons and Zack was escorted out of the building and detained until the police arrived.
-If Night Club's procedure was to contact the police and not break-up fights, would Night Club be liable to Pat?

Accepted Answer

A)  Night Club will not be liable because Night Club did not authorize Trevor's actions and has a policy against breaking-up fights. 
B)  Night Club will not be liable because Trevor's actions are covered under the good Samaritan law. 
C)  Night Club will be liable because Trevor was negligent. 
D)  Night Club will be liable because it should have known Trevor would engage in these types of actions. 
E)  Night Club will not be liable because Trevor is an independent contractor. 
A)  Night Club will not be liable because Night Club did not authorize Trevor's actions and has a policy against breaking-up fights. 
B)  Night Club will not be liable because Trevor's actions are covered under the good Samaritan law. 
C)  Night Club will be liable because Trevor was negligent. 
D)  Night Club will be liable because it should have known Trevor would engage in these types of actions. 
E)  Night Club will not be liable because Trevor is an independent contractor.

Question 17

When a court considers whether an employee's act occurred within the scope of his or her employment, it considers, among other things, whether the employee used force not expected by the employer.

Accepted Answer

A) True 
 B)False

Question 18

In the United Arab Emirates (UAE) under both Commercial Transaction Law and UAE Civil code, ________ are entitled to seek compensation in the event of termination.

Accepted Answer

A)  regular agents 
B)  special agents 
C)  government officials 
D)  independent contractors 
E)  unregistered agents 
A)  regular agents 
B)  special agents 
C)  government officials 
D)  independent contractors 
E)  unregistered agents

Question 19

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
-Which of the following is true regarding whether Greg has any right of recovery against Simone for his injured foot?

Accepted Answer

A)  Greg has no right of recovery against Simone because Lea had not dropped any boxes before, and Simone had no reason to suspect she would injure Greg. 
B)  Greg has a right of recovery against Simone only if Lea is insolvent. 
C)  Greg has a right of recovery against Simone, but only for 50% of his damages. 
D)  Greg has no right of recovery against Simone unless he is able to establish wrongdoing on her part in hiring Lea. 
E)  Greg has a right of recovery against Simone. 
A)  Greg has no right of recovery against Simone because Lea had not dropped any boxes before, and Simone had no reason to suspect she would injure Greg. 
B)  Greg has a right of recovery against Simone only if Lea is insolvent. 
C)  Greg has a right of recovery against Simone, but only for 50% of his damages. 
D)  Greg has no right of recovery against Simone unless he is able to establish wrongdoing on her part in hiring Lea. 
E)  Greg has a right of recovery against Simone.

Question 20

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers, telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
-Which of the following is true regarding any liability Jun has to Beth?

Accepted Answer

A)  Jun has no liability to Beth. 
B)  Jun has liability to Beth under the theory of misrepresentation but only if Hae is insolvent. 
C)  Jun is liable to Beth under the theory of negligence. 
D)  Jun is liable to Beth for only 50% of any damages she can prove. 
E)  Jun is liable to Beth under the theory of misrepresentation. 
A)  Jun has no liability to Beth. 
B)  Jun has liability to Beth under the theory of misrepresentation but only if Hae is insolvent. 
C)  Jun is liable to Beth under the theory of negligence. 
D)  Jun is liable to Beth for only 50% of any damages she can prove. 
E)  Jun is liable to Beth under the theory of misrepresentation.

Exam 34: Liability to Third Parties and Termination

The Latin phrase ________ means to "let the superior speak."

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?

If a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal, which of the following is true?

Arun was leaving the country and gave his co-worker Jerome a power of attorney. This is a special type of express agent authority.

Which statement is false regarding termination of agency based on operation of law?

Which country is partially influenced by classical Islamic law and suggests that under respondeat superior those who cause harm should repair it?

The text discussed the case of Dunkley v. S. Coraluzzo Petroleum Transporters, where the New Jersey Appellate Court addressed an employer's liability for the harassing conduct of its supervisor. Which of the following was the result?

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee?

What type of principal exists when his or her identity is not known but the third party is aware that the agent is making an agreement on behalf of the principal?

Pelley gives Jorge a durable power of attorney, this gives Pelley what?

The principal may terminate an agency coupled with an interest.

If an agent is acting within his or her authority on a contract involving an undisclosed principal, the agent is ________.

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Which of the following is false regarding termination of agency in the Netherlands?

When a court considers whether an employee's act occurred within the scope of his or her employment, it considers, among other things, whether the employee used force not expected by the employer.

In the United Arab Emirates (UAE) under both Commercial Transaction Law and UAE Civil code, ________ are entitled to seek compensation in the event of termination.

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

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