Question 1

The employer of a salesperson:

Accepted Answer

A)  is only bound by a contract if the employee is acting as a soliciting agent. 
B)  is not bound by a contract if the employee is acting as a contracting agent. 
C)  is not bound by a contract until the contract is accepted. 
D)  is always bound by contracts made by all employee salespersons. 
A)  is only bound by a contract if the employee is acting as a soliciting agent. 
B)  is not bound by a contract if the employee is acting as a contracting agent. 
C)  is not bound by a contract until the contract is accepted. 
D)  is always bound by contracts made by all employee salespersons. B

Question 2

The rule of law imposing vicarious liability on an innocent employer for the wrong of an employee is known as the doctrine of respondeat superior.

Accepted Answer

A) True 
 B)False  True

Question 3

A principal is liable for the crimes of its agent in all of the following scenarios except when: ______.

Accepted Answer

A)  the crime is committed at the principal's direction. 
B)  the agent is an employee and sells liquor to a minor without permission. 
C)  the agent in the course of employment violates environmental protection laws. 
D)  the agent is an independent contractor. 
A)  the crime is committed at the principal's direction. 
B)  the agent is an employee and sells liquor to a minor without permission. 
C)  the agent in the course of employment violates environmental protection laws. 
D)  the agent is an independent contractor. D

Question 4

Eric is a driver for UPS. While delivering packages in the rain, he accidentally hits Lou, causing him serious physical injuries. Lou comes to you asking for advice on who is liable; what do you advise?

Accepted Answer

A)  File a claim against Eric only based on respondeat superior because the injuries were outside the scope of employment. 
B)  File a claim against UPS based on respondeat superior because the injuries occurred within the scope of employment 
C)  Contact the prosecutor for criminal charges. 
D)  File a claim against UPS based on negligent hiring. 
A)  File a claim against Eric only based on respondeat superior because the injuries were outside the scope of employment. 
B)  File a claim against UPS based on respondeat superior because the injuries occurred within the scope of employment 
C)  Contact the prosecutor for criminal charges. 
D)  File a claim against UPS based on negligent hiring.

Question 5

A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent's authority.

Accepted Answer

A) True 
 B)False

Question 6

Subject to certain limitations, a third person, on learning of the existence of an undisclosed principal, may sue the principal.

Accepted Answer

A) True 
 B)False

Question 7

An agent is necessarily liable if the principal is undisclosed.

Accepted Answer

A) True 
 B)False

Question 8

The liability of a buyer for the purchase price of goods is terminated by the fact that the buyer gave the buyer's agent the purchase price to remit to the seller.

Accepted Answer

A) True 
 B)False

Question 9

Agents may intentionally make themselves contractually liable to third persons.

Accepted Answer

A) True 
 B)False

Question 10

The fact that a tort or crime is committed by an employee imposes vicarious liability on an employer.

Accepted Answer

A) True 
 B)False

Question 11

When a fact is known to the agent of a seller, the sale is deemed made by the seller with knowledge of that fact.

Accepted Answer

A) True 
 B)False

Question 12

An employer may be liable on the theory of negligent hiring:

Accepted Answer

A)  when it is shown the employer knew the employee would create an undue risk of harm in carrying out job responsibilities. 
B)  by hiring an individual with a criminal record. 
C)  whether or not prospective employees fill out applications forms and are subject to pre-employment background checks and character qualifications. 
D)  if he participates in the agent's tortious conduct. 
A)  when it is shown the employer knew the employee would create an undue risk of harm in carrying out job responsibilities. 
B)  by hiring an individual with a criminal record. 
C)  whether or not prospective employees fill out applications forms and are subject to pre-employment background checks and character qualifications. 
D)  if he participates in the agent's tortious conduct.

Question 13

If an agent is sued for breach of implied warranty of authority by a third party, none of the following are defenses except: ______.

Accepted Answer

A)  the agent acted in good faith. 
B)  the agent misunderstood the scope of authority. 
C)  the third party knew the agent was acting beyond her authority. 
D)  the agent had written authorization. 
A)  the agent acted in good faith. 
B)  the agent misunderstood the scope of authority. 
C)  the third party knew the agent was acting beyond her authority. 
D)  the agent had written authorization.

Question 14

Apparent authority has the same effect as:

Accepted Answer

A)  undisclosed authority. 
B)  actual authority. 
C)  partially disclosed authority. 
D)  imputation authority 
A)  undisclosed authority. 
B)  actual authority. 
C)  partially disclosed authority. 
D)  imputation authority

Question 15

When a business owner uses an independent contractor to perform work, the owner is not liable in any of the situations below except:

Accepted Answer

A)  for the contractor's direct harm to third persons or their property. 
B)  breach of contract by the contractor. 
C)  for the negligence of the contractor's employees. 
D)  for harm resulting from a contractor's inherently dangerous work. 
A)  for the contractor's direct harm to third persons or their property. 
B)  breach of contract by the contractor. 
C)  for the negligence of the contractor's employees. 
D)  for harm resulting from a contractor's inherently dangerous work.

Question 16

Payment to an authorized agent is:

Accepted Answer

A)  payment to the principal only if the agent remits the payment. 
B)  payment to the principal if the third person informs the principal. 
C)  payment to the principal, provided the agent does not misappropriate the payment. 
D)  payment to the principal. 
A)  payment to the principal only if the agent remits the payment. 
B)  payment to the principal if the third person informs the principal. 
C)  payment to the principal, provided the agent does not misappropriate the payment. 
D)  payment to the principal.

Question 17

The principal is bound by knowledge but not by notice of any fact that is acquired by an agent while acting within the scope of actual or apparent authority.

Accepted Answer

A) True 
 B)False

Question 18

Statements by an agent ______ bind the principal unless ________.

Accepted Answer

A)  will not, the principal is disclosed. 
B)  will, they were made at the time of performance. 
C)  will not, they were made at the time of performance., 
D)  will not, the principal is disclosed., 
A)  will not, the principal is disclosed. 
B)  will, they were made at the time of performance. 
C)  will not, they were made at the time of performance., 
D)  will not, the principal is disclosed.,

Question 19

If an agent commits a crime, the agent's liability will depend on the nature of the agency relationship.

Accepted Answer

A) True 
 B)False

Question 20

Pamela was the agent in charge of distribution and collections for the Coble Dairy Products Cooperative. Thrower operated a grocery store and purchased dairy products from Coble. Pamela made false invoice sheets, showing delivery to Thrower of greater quantities than Thrower actually had ordered or received. Pamela collected from Thrower on the basis of these increased amounts, and then kept for herself the difference between the increased amounts and the amounts that should have been charged. When Thrower learned of this, he sued Coble for the excess payments he had made. Coble denied that Pamela was its agent in making excess collections. Will Thrower win?

Accepted Answer

Yes. Judgment will be for Thro

Exam 37: Third Persons in Agency

The employer of a salesperson:

The rule of law imposing vicarious liability on an innocent employer for the wrong of an employee is known as the doctrine of respondeat superior.

A principal is liable for the crimes of its agent in all of the following scenarios except when: ______.

Eric is a driver for UPS. While delivering packages in the rain, he accidentally hits Lou, causing him serious physical injuries. Lou comes to you asking for advice on who is liable; what do you advise?

A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent's authority.

Subject to certain limitations, a third person, on learning of the existence of an undisclosed principal, may sue the principal.

An agent is necessarily liable if the principal is undisclosed.

The liability of a buyer for the purchase price of goods is terminated by the fact that the buyer gave the buyer's agent the purchase price to remit to the seller.

Agents may intentionally make themselves contractually liable to third persons.

The fact that a tort or crime is committed by an employee imposes vicarious liability on an employer.

When a fact is known to the agent of a seller, the sale is deemed made by the seller with knowledge of that fact.

An employer may be liable on the theory of negligent hiring:

If an agent is sued for breach of implied warranty of authority by a third party, none of the following are defenses except: ______.

Apparent authority has the same effect as:

When a business owner uses an independent contractor to perform work, the owner is not liable in any of the situations below except:

Payment to an authorized agent is:

The principal is bound by knowledge but not by notice of any fact that is acquired by an agent while acting within the scope of actual or apparent authority.

Statements by an agent ______ bind the principal unless ________.

If an agent commits a crime, the agent's liability will depend on the nature of the agency relationship.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters

Statements by an agent bind the principal unless __.