Question 1

For a ratification to be effective, the principal:

Accepted Answer

A)  must have knowledge of all material facts concerning the transaction. 
B)  must communicate her intent to ratify to the third party. 
C)  must have been in existence when the act was done. 
D)  M ust have knowledge of all material facts concerning the transaction and  must have been in existence when the act was done. 
A)  must have knowledge of all material facts concerning the transaction. 
B)  must communicate her intent to ratify to the third party. 
C)  must have been in existence when the act was done. 
D)  M ust have knowledge of all material facts concerning the transaction and  must have been in existence when the act was done.

Question 2

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 3

Usually in cases where there is a known principal, the agent has liability for, and rights under, contracts made on behalf of a principal.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Compare and contrast ratification and adoption of unauthorized contracts.

Accepted Answer

Both ratification and adoption are means

Question 6

Gary hires Doug to burn off his fields to kill the weeds. If the fire gets out of control because of Doug's negligence and the fire damages Philip's wood fence:

Accepted Answer

A)  Gary has no liability because Doug was an independent contractor. 
B)  Doug bears sole responsibility for damage to the fence because it was his negligence that caused the fire to escape the intended boundaries. 
C)  Gary is vicariously liable because he authorized an abnormally dangerous activity. 
D)  Philip cannot hold Gary liable unless Gary was personally involved in the act of burning the fields. 
A)  Gary has no liability because Doug was an independent contractor. 
B)  Doug bears sole responsibility for damage to the fence because it was his negligence that caused the fire to escape the intended boundaries. 
C)  Gary is vicariously liable because he authorized an abnormally dangerous activity. 
D)  Philip cannot hold Gary liable unless Gary was personally involved in the act of burning the fields.

Question 7

Arthur is authorized to collect accounts for Peter. Peter dies, and there is no notice given to Theresa, who pays Arthur, as she has done in the past. Under the rules of the Third Restatement and the Uniform Durable Power of Attorney Act, if Arthur absconds with the money, Theresa will not have to pay again.

Accepted Answer

A) True 
 B)False

Question 8

In the presence of Betty, Ann tells Thomas that Ann is Betty's agent. In reality, Ann has no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is correct with regard to the doctrine of respondeat superior ?

Accepted Answer

A)  It is a form of liability without fault. 
B)  It ordinarily holds an employer liable for the acts of both employees and independent contractors. 
C)  The liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
D)  It is a form of liability without fault and t he liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
A)  It is a form of liability without fault. 
B)  It ordinarily holds an employer liable for the acts of both employees and independent contractors. 
C)  The liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment. 
D)  It is a form of liability without fault and t he liability of the principal under the doctrine is vicarious and depends upon proof of wrongdoing by the employee within the scope of employment.

Question 10

Jack was fired by Bob but decided to try to win back his job as agent by getting a big new contract. He approached Sharon, a new client, and made a pitch to sell Bob's product. Sharon agreed to buy 100. Jack tells Bob. What are the legal consequences?

Accepted Answer

A)  Bob has to hire Jack again and then make the deal. 
B)  Bob would have to ratify the deal to get the benefit of the contract. 
C)  Bob would have to negotiate the deal with Sharon himself. 
D)  Jack would forfeit his commission if Bob took the contract. 
A)  Bob has to hire Jack again and then make the deal. 
B)  Bob would have to ratify the deal to get the benefit of the contract. 
C)  Bob would have to negotiate the deal with Sharon himself. 
D)  Jack would forfeit his commission if Bob took the contract.

Question 11

Dan, an agent for Ramona, sees what he thinks is a good deal for Ramona. Without asking whether he has authority to negotiate the deal, Dan enters into a contract on Ramona's behalf. Ramona says later that she isn't interested. Is Ramona liable on the contract? Is Dan liable on the contract? Explain.

Accepted Answer

If Dan has express, implied, or apparent

Question 12

Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

Accepted Answer

A)  The agent has no liability to the third person if the agent has acted within the scope of her authority. 
B)  The agent is personally liable upon the contract. 
C)  The undisclosed principal has no liability on the contract, even if her existence and identity are discovered by the third person. 
D)  If the third party obtains a judgment against the principal and the judgment is satisfied, the agent may still have liability to that third party. 
A)  The agent has no liability to the third person if the agent has acted within the scope of her authority. 
B)  The agent is personally liable upon the contract. 
C)  The undisclosed principal has no liability on the contract, even if her existence and identity are discovered by the third person. 
D)  If the third party obtains a judgment against the principal and the judgment is satisfied, the agent may still have liability to that third party.

Question 13

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

Accepted Answer

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

Question 14

Unless otherwise agreed, an agent making a contract with actual or apparent authority on behalf of an unidentified principal is a party to the contract.

Accepted Answer

A) True 
 B)False

Question 15

Identify three ways an agent may agree to become liable on a contract between the principal and the third party.

Accepted Answer

An agent may agree to become liable by:

Question 16

Frank, acting as a promoter for Garleen Co., a corporation not yet in existence, makes a contract with Towne Supplies. When Garleen Co. is formed, it may:

Accepted Answer

A)  adopt the contract, but Frank would not be released from potential liability on the contract. 
B)  in all states, ratify the contract, thereby releasing Frank from potential liability. 
C)  adopt the contract, thereby making it retroactive. 
D)  ratify all or part of Frank's contract. 
A)  adopt the contract, but Frank would not be released from potential liability on the contract. 
B)  in all states, ratify the contract, thereby releasing Frank from potential liability. 
C)  adopt the contract, thereby making it retroactive. 
D)  ratify all or part of Frank's contract.

Question 17

Which of the following is true regarding an agent who is acting for an undisclosed principal?

Accepted Answer

A)  The agent will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud. 
A)  The agent will bind both himself and the principal on most contracts. 
B)  The third party will never be bound in a contract with the principal. 
C)  An undisclosed principal will bind only himself and not the agent. 
D)  Failure to disclose the name of the principal is a form of fraud.

Question 18

An agent is never personally liable for the torts he commits while in the scope of his employment.

Accepted Answer

A) True 
 B)False

Question 19

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 29: Relationship With Third Parties

For a ratification to be effective, the principal:

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.

Usually in cases where there is a known principal, the agent has liability for, and rights under, contracts made on behalf of a principal.

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

Compare and contrast ratification and adoption of unauthorized contracts.

Gary hires Doug to burn off his fields to kill the weeds. If the fire gets out of control because of Doug's negligence and the fire damages Philip's wood fence:

In the presence of Betty, Ann tells Thomas that Ann is Betty's agent. In reality, Ann has no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

Which of the following is correct with regard to the doctrine of respondeat superior ?

Jack was fired by Bob but decided to try to win back his job as agent by getting a big new contract. He approached Sharon, a new client, and made a pitch to sell Bob's product. Sharon agreed to buy 100. Jack tells Bob. What are the legal consequences?

Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

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

Unless otherwise agreed, an agent making a contract with actual or apparent authority on behalf of an unidentified principal is a party to the contract.

Identify three ways an agent may agree to become liable on a contract between the principal and the third party.

Frank, acting as a promoter for Garleen Co., a corporation not yet in existence, makes a contract with Towne Supplies. When Garleen Co. is formed, it may:

Which of the following is true regarding an agent who is acting for an undisclosed principal?

An agent is never personally liable for the torts he commits while in the scope of his employment.

An agent for an unidentified principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

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

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 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 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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