Question 1

Which of the following is not correct regarding the relationship between an independent contractor and a principal?

Accepted Answer

A)  The right of control is the essential and often decisive factor in determining whether someone is an independent contractor or an employee. 
B)  The contractor is liable under respondeat superior . 
C)  The contractor generally contracts to perform services but is not controlled by the principal. 
D)  Under some circumstances, a principal will be vicariously liable for torts committed by a carefully selected independent contractor. 
A)  The right of control is the essential and often decisive factor in determining whether someone is an independent contractor or an employee. 
B)  The contractor is liable under respondeat superior . 
C)  The contractor generally contracts to perform services but is not controlled by the principal. 
D)  Under some circumstances, a principal will be vicariously liable for torts committed by a carefully selected independent contractor.

Question 2

Actual authority consists of both express and implied authority.

Accepted Answer

A) True 
 B)False

Question 3

When is a principal liable for her own conduct in tort involving the use of agents?

Accepted Answer

Such liability may arise in two primary

Question 4

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.

Accepted Answer

A) True 
 B)False

Question 5

Without authority, Donegal makes a contract with Evan, supposedly on behalf of Shawna.Shawna may ratify the contract, even if Evan loses contractual capacity before she ratifies the contract.

Accepted Answer

A) True 
 B)False

Question 6

a.What is an undisclosed principal? 
b.What is an unidentified (partially disclosed) principal? 
c.What liability does an agent have to a third party when the principal is either undisclosed or unidentified (partially disclosed) ? 
 ​

d.
 Dale is asked to be an agent for Phil, but Phil does not wish third parties to know that Dale represents him.In light of your answer to part (c), why would Dale want to be an agent for Phil? Why would Phil wish that third parties not know his identity? Explain.

Accepted Answer

a. An undisclosed principal is not known

Question 7

An agent, at his principal's direction, fixes prices with the principal's competitors.The result is:

Accepted Answer

A)  both the principal and agent are criminally liable. 
B)  only the principal is criminally liable. 
C)  any liability would be civil only. 
D)  only the agent is criminally liable. 
A)  both the principal and agent are criminally liable. 
B)  only the principal is criminally liable. 
C)  any liability would be civil only. 
D)  only the agent is criminally liable.

Question 8

An agent is not personally liable for the torts he commits while in the scope of his employment.

Accepted Answer

A) True 
 B)False

Question 9

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

Accepted Answer

A) True 
 B)False

Question 10

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the scope of his employment.

Accepted Answer

A) True 
 B)False

Question 11

Apparent authority is not actual authority.

Accepted Answer

A) True 
 B)False

Question 12

The doctrine of __________ is the basis for an employer's liability for an unauthorized tort committed by an employee within the scope of employment.

Accepted Answer

A)  respondeat superior 
B)  apparent authority 
C)  direct liability 
D)  indemnification 
A)  respondeat superior 
B)  apparent authority 
C)  direct liability 
D)  indemnification

Question 13

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

Accepted Answer

A) True 
 B)False

Question 14

The court in Connes v.Molalla Transport System, Inc.found:

Accepted Answer

A)  the tort of negligent hiring imposes a duty on employers to ensure its employees will not engage in violent acts. 
B)  employers have a duty to investigate all potential employees to make sure they will not create an undue risk of harm to others. 
C)  the scope of an employer's duty to exercise reasonable care in hiring bears no relationship to the anticipated degree of contact the employee will have with others. 
D)  the employer had no duty to independently investigate this potential employee's criminal background because the employer had no reason to foresee that hiring the person would create an unreasonable risk of harm to others. 
A)  the tort of negligent hiring imposes a duty on employers to ensure its employees will not engage in violent acts. 
B)  employers have a duty to investigate all potential employees to make sure they will not create an undue risk of harm to others. 
C)  the scope of an employer's duty to exercise reasonable care in hiring bears no relationship to the anticipated degree of contact the employee will have with others. 
D)  the employer had no duty to independently investigate this potential employee's criminal background because the employer had no reason to foresee that hiring the person would create an unreasonable risk of harm to others.

Question 15

A person who undertakes to make a contract on behalf of another person gives an implied warranty that he is in fact authorized to make the contract on behalf of the person he purports to represent.

Accepted Answer

A) True 
 B)False

Question 16

Nell exceeds her authority when making a contract for Denver.If he ratifies the contract, both Nell and Denver are in the same position as the one they would have been in had Denver actually authorized the act originally except that Nell is not entitled to compensation.

Accepted Answer

A) True 
 B)False

Question 17

The power of an agent is her ability to change the legal status of her principal.

Accepted Answer

A) True 
 B)False

Question 18

Sam is a sales representative for the Incman Corporation.Sam has a terrible driving record and has had his driver's license revoked, but nevertheless he continues to drive the company car for his job.One day he drives too fast for conditions, goes through a red light, and strikes a pedestrian.The accident happened despite the fact that Sam's supervisor at Incman had repeatedly reprimanded him and advised him to drive more cautiously.Incman:

Accepted Answer

A)  has no liability, because they did not authorize Sam to drive carelessly. 
B)  is partial  liable , because Sam's actions were criminal. 
C)  has no liability, because it has adequately supervised Sam as its agent. 
D)  is liable even though it did not authorize Sam to drive carelessly, because it employed an improper person as its agent. 
A)  has no liability, because they did not authorize Sam to drive carelessly. 
B)  is partial  liable , because Sam's actions were criminal. 
C)  has no liability, because it has adequately supervised Sam as its agent. 
D)  is liable even though it did not authorize Sam to drive carelessly, because it employed an improper person as its agent.

Question 19

Under the Second Restatement, the bankruptcy of the principal terminates, without notice, the power of an agent to affect the principal's property that passes to the bankruptcy trustee.

Accepted Answer

A) True 
 B)False

Question 20

An employer may have criminal liability for the acts of an employee.

Accepted Answer

A) True 
 B)False

Exam 29: Relationship With Third Partiespart Vii: Business Associations

Which of the following is not correct regarding the relationship between an independent contractor and a principal?

Actual authority consists of both express and implied authority.

When is a principal liable for her own conduct in tort involving the use of agents?

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.

Without authority, Donegal makes a contract with Evan, supposedly on behalf of Shawna.Shawna may ratify the contract, even if Evan loses contractual capacity before she ratifies the contract.

An agent, at his principal's direction, fixes prices with the principal's competitors.The result is:

An agent is not personally liable for the torts he commits while in the scope of his employment.

Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the scope of his employment.

Apparent authority is not actual authority.

The doctrine of __________ is the basis for an employer's liability for an unauthorized tort committed by an employee within the scope of employment.

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

The court in Connes v.Molalla Transport System, Inc.found:

A person who undertakes to make a contract on behalf of another person gives an implied warranty that he is in fact authorized to make the contract on behalf of the person he purports to represent.

Nell exceeds her authority when making a contract for Denver.If he ratifies the contract, both Nell and Denver are in the same position as the one they would have been in had Denver actually authorized the act originally except that Nell is not entitled to compensation.

The power of an agent is her ability to change the legal status of her principal.

Under the Second Restatement, the bankruptcy of the principal terminates, without notice, the power of an agent to affect the principal's property that passes to the bankruptcy trustee.

An employer may have criminal liability for the acts of an employee.

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

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 Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

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 Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

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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