Question 1

All independent contractors are agents, but not all agents are independent contractors.

Accepted Answer

A) True 
 B)False  False

Question 2

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. B

Question 3

An electrician hired to redo the wiring in a building is an agent of the owner of the building.

Accepted Answer

A) True 
 B)False  False

Question 4

In some states, the authority of an agent to sell land must be in writing and signed by the principal.

Accepted Answer

A) True 
 B)False

Question 5

Whether an agency relationship has been created is determined by using a subjective test.

Accepted Answer

A) True 
 B)False

Question 6

An agent will not be authorized to act for a principal unless he receives some consideration for the task.

Accepted Answer

A) True 
 B)False

Question 7

When the agency terminates, the agent's duty of confidentiality continues.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

a.Explain how an agency relationship comes to an end. 
b. Is an agency relationship ever irrevocable? Explain.

Accepted Answer

a. Agency is terminated by:
(1) acts of

Question 10

A(n) __________ is a person in a position of trust and confidence who has a duty of utmost loyalty and good faith.

Accepted Answer

A)  fiduciary 
B)  servant 
C)  independent contractor 
D)  principal 
A)  fiduciary 
B)  servant 
C)  independent contractor 
D)  principal

Question 11

Victor negligently led Gus to believe that Brenda had the authority to act on Victor's behalf. If Brenda had no authority but Gus reasonably and in good faith relied on Brenda's apparent authority:

Accepted Answer

A)  Victor can be liable to Gus for Gus's loss suffered because of his reliance. 
B)  Victor cannot be held liable to Gus because Brenda had no actual authority. 
C)  only Brenda can be held liable for any loss Gus suffered because of his reliance. 
D)  Gus must bear any loss because he did not determine the extent or existence of Brenda'a authority. 
A)  Victor can be liable to Gus for Gus's loss suffered because of his reliance. 
B)  Victor cannot be held liable to Gus because Brenda had no actual authority. 
C)  only Brenda can be held liable for any loss Gus suffered because of his reliance. 
D)  Gus must bear any loss because he did not determine the extent or existence of Brenda'a authority.

Question 12

A gratuitous agency is not a true agency because it is not formed by contract.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is correct with regard to the capacity of an agent?

Accepted Answer

A)  The incapacity of the agent disqualifies him from making a contract that is binding on his principal. 
B)  No mental capacity is necessary for an agent. 
C)  If an incompetent person who is not under guardianship appoints an agent, contracts made by that agent are voidable. 
D)  A young child or a person under guardianship has the capacity to act as an agent. 
A)  The incapacity of the agent disqualifies him from making a contract that is binding on his principal. 
B)  No mental capacity is necessary for an agent. 
C)  If an incompetent person who is not under guardianship appoints an agent, contracts made by that agent are voidable. 
D)  A young child or a person under guardianship has the capacity to act as an agent.

Question 14

Agency relationships are governed primarily by federal statute.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Which of the following is NOT a major duty, which the agent owes to the principal?

Accepted Answer

A)  Duty to obey instructions. 
B)  Duty to act in good faith and with loyalty. 
C)  Duty to indemnify. 
D)  Duty to exercise care. 
A)  Duty to obey instructions. 
B)  Duty to act in good faith and with loyalty. 
C)  Duty to indemnify. 
D)  Duty to exercise care.

Question 17

The appointment of an agent by a minor or an incompetent not under guardianship and any resulting contracts are voidable.

Accepted Answer

A) True 
 B)False

Question 18

The result of an agent's functioning is exactly the same as if the principal had dealt directly with the third person.

Accepted Answer

A) True 
 B)False

Question 19

A minor may legally act as an agent.

Accepted Answer

A) True 
 B)False

Question 20

If an agent receives a gift from a third person with whom he is dealing on behalf of the principal, he can keep it without notifying the principal.

Accepted Answer

A) True 
 B)False

Exam 28: Relationship of Principal and Agent

All independent contractors are agents, but not all agents are independent contractors.

A gratuitous agent:

An electrician hired to redo the wiring in a building is an agent of the owner of the building.

In some states, the authority of an agent to sell land must be in writing and signed by the principal.

Whether an agency relationship has been created is determined by using a subjective test.

An agent will not be authorized to act for a principal unless he receives some consideration for the task.

When the agency terminates, the agent's duty of confidentiality continues.

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

a.Explain how an agency relationship comes to an end. b. Is an agency relationship ever irrevocable? Explain.

A(n) __________ is a person in a position of trust and confidence who has a duty of utmost loyalty and good faith.

Victor negligently led Gus to believe that Brenda had the authority to act on Victor's behalf. If Brenda had no authority but Gus reasonably and in good faith relied on Brenda's apparent authority:

A gratuitous agency is not a true agency because it is not formed by contract.

Which of the following is correct with regard to the capacity of an agent?

Agency relationships are governed primarily by federal statute.

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

Which of the following is NOT a major duty, which the agent owes to the principal?

The appointment of an agent by a minor or an incompetent not under guardianship and any resulting contracts are voidable.

The result of an agent's functioning is exactly the same as if the principal had dealt directly with the third person.

A minor may legally act as an agent.

If an agent receives a gift from a third person with whom he is dealing on behalf of the principal, he can keep it without notifying the principal.

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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