Question 1

Through agents,a principal can conduct multiple business operations simultaneously.

Accepted Answer

A) True 
 B)False  True

Question 2

Rita is appointed as an agent for Superior Sales,Inc.The agency agree-ment is silent as to the level of sales that Rita is expected to achieve.She must

Accepted Answer

A) achieve nothing because the agreement says nothing on the issue. 
B) attain the level that Rita achieved with her previous employer. 
C) maintain the level Superior attained before Rita became an agent. 
D) use reasonable diligence and skill in selling. 
A) achieve nothing because the agreement says nothing on the issue. 
B) attain the level that Rita achieved with her previous employer. 
C) maintain the level Superior attained before Rita became an agent. 
D) use reasonable diligence and skill in selling. D

Question 3

Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Company.Iggy tells Joy to reveal only that she is buying the firm on behalf of a third party,without telling Kup-a-Koffee's seller who that third party is.Iggy is

Accepted Answer

A) a disclosed principal. 
B) an implied principal. 
C) an undisclosed principal. 
D) a partially disclosed principal 
A) a disclosed principal. 
B) an implied principal. 
C) an undisclosed principal. 
D) a partially disclosed principal D

Question 4

Employees who deal with third parties are agents of their employers.

Accepted Answer

A) True 
 B)False

Question 5

It is basic tenet of agency law that notice to the agent is notice to the principal.

Accepted Answer

A) True 
 B)False

Question 6

Julia is an agent who purchases wool for Kara's Knitting Company.In the course of her performance for Kara's Knitting Company,Julia pays for the gas for the company car and for some storage boxes for the wool.Kara's Knitting Company must reimburse Julia because of the principal's

Accepted Answer

A) duty of performance. 
B) duty of loyalty. 
C) duty of compensation. 
D) duty of reimbursement. 
A) duty of performance. 
B) duty of loyalty. 
C) duty of compensation. 
D) duty of reimbursement.

Question 7

A person must have contractual capacity to be an agent.

Accepted Answer

A) True 
 B)False

Question 8

Brad is an employee of Custodial Service,Inc.In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi,a court will not con-sider whether

Accepted Answer

A) Brad was acting within the scope of the agency. 
B) Brad was acting within the scope of his employment. 
C) Custodial authorized the act. 
D) Custodial was personally at fault. 
A) Brad was acting within the scope of the agency. 
B) Brad was acting within the scope of his employment. 
C) Custodial authorized the act. 
D) Custodial was personally at fault.

Question 9

Bayou Development Corporation (BDC) hiresGulfview Brokerage Associates to sell the condominiums in a building at BDC's coastal resort.The agency will terminate

Accepted Answer

A) after the condos have been sold. 
B) if the prices of the condos must be reduced to sell them 
C) once BDC obtains insurance to cover the property. 
D) when BDC pays Gulfview its first commission. 
A) after the condos have been sold. 
B) if the prices of the condos must be reduced to sell them 
C) once BDC obtains insurance to cover the property. 
D) when BDC pays Gulfview its first commission.

Question 10

If a principal cannot be contacted in an emergency situation,an agent cannot deviate from previously given instructions.

Accepted Answer

A) True 
 B)False

Question 11

Genetic Seed Company hires Howie to work on Genetic's shipping dock,accepting deliveries and dealing with other companies' drivers.With respect to Genetic,Howie is most likely

Accepted Answer

A) an agent. 
B) an independent contractor. 
C) a principal. 
D) awork for hire. 
A) an agent. 
B) an independent contractor. 
C) a principal. 
D) awork for hire.

Question 12

Bernard is an expert on exotic flowers.Fine Floral Fixtures,Inc.(FFF) hires Bernard to order exotic flowers from various greenhouses.Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF.Bernard has breached

Accepted Answer

A) the duty of performance. 
B) the duty of loyalty. 
C) no duty. 
D) the duty of notification. 
A) the duty of performance. 
B) the duty of loyalty. 
C) no duty. 
D) the duty of notification.

Question 13

The equal dignity rule requires that a principal and agent treat each other with "equal dignity."

Accepted Answer

A) True 
 B)False

Question 14

Delite Candy Company hires Elton to sell Delite's products in a certain area.Delite agrees to pay Elton a salary,plus commission,for a trial period.They also agree that Elton can sell using any methods and during any hours that seem appropriate.The most important factor in whether Elton is Delite's employee is

Accepted Answer

A) the amount of Elton's salary. 
B) thecontrol Delite has over the details of the work. 
C) thelength of the trial period. 
D) the title that designates Elton's position. 
A) the amount of Elton's salary. 
B) thecontrol Delite has over the details of the work. 
C) thelength of the trial period. 
D) the title that designates Elton's position.

Question 15

Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf.Edwina later contacts Frida to affirm the contract.This is

Accepted Answer

A) an agency by agreement. 
B) an agency by estoppel. 
C) anagency by ratification. 
D) not the creation of an agency relationship. 
A) an agency by agreement. 
B) an agency by estoppel. 
C) anagency by ratification. 
D) not the creation of an agency relationship.

Question 16

Brenda is a purchasing agent for Commodities Exchange Corporation.Dennis,a Commodities corporate officer,gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary.The next day,Dennis calls Brenda and tells her to buy only fifty note-book computers and nothing else.Brenda shows the written authority to E-Products,Inc.,and enters into a contract with E-Products to buy sixty note-book computers and a selection of printers,scanners,and extra storage media.E-Products ships the order to Commodities.Is Commodities li-able to E-Products under the contract? Is Brenda liable? In each case,if so,why?If not,why not?

Accepted Answer

Commodities is liable to E-Products.Bren

Question 17

For an agent's implied authority to be effective,aprincipal must ratify it.

Accepted Answer

A) True 
 B)False

Question 18

Real estate brokers are independent contractors.

Accepted Answer

A) True 
 B)False

Question 19

In a principal-agent relationship,the parties agree that the principal will act on behalf and instead of the agent in negotiating and transacting business with third persons.

Accepted Answer

A) True 
 B)False

Question 20

Without authorization,Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house.Sari ratifies the contract.Later,Sari tries to rescind the part of the contract re-lat-ing to the exterior.This attempt will be

Accepted Answer

A) partly successful. 
B) partly unsuccessful. 
C) totally successful 
A) partly successful. 
B) partly unsuccessful. 
C) totally successful

Exam 21: Agency Relationships

Through agents,a principal can conduct multiple business operations simultaneously.

Rita is appointed as an agent for Superior Sales,Inc.The agency agree-ment is silent as to the level of sales that Rita is expected to achieve.She must

Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Company.Iggy tells Joy to reveal only that she is buying the firm on behalf of a third party,without telling Kup-a-Koffee's seller who that third party is.Iggy is

Employees who deal with third parties are agents of their employers.

It is basic tenet of agency law that notice to the agent is notice to the principal.

Julia is an agent who purchases wool for Kara's Knitting Company.In the course of her performance for Kara's Knitting Company,Julia pays for the gas for the company car and for some storage boxes for the wool.Kara's Knitting Company must reimburse Julia because of the principal's

A person must have contractual capacity to be an agent.

Brad is an employee of Custodial Service,Inc.In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi,a court will not con-sider whether

Bayou Development Corporation (BDC) hiresGulfview Brokerage Associates to sell the condominiums in a building at BDC's coastal resort.The agency will terminate

If a principal cannot be contacted in an emergency situation,an agent cannot deviate from previously given instructions.

Genetic Seed Company hires Howie to work on Genetic's shipping dock,accepting deliveries and dealing with other companies' drivers.With respect to Genetic,Howie is most likely

Bernard is an expert on exotic flowers.Fine Floral Fixtures,Inc.(FFF) hires Bernard to order exotic flowers from various greenhouses.Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF.Bernard has breached

The equal dignity rule requires that a principal and agent treat each other with "equal dignity."

Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf.Edwina later contacts Frida to affirm the contract.This is

For an agent's implied authority to be effective,aprincipal must ratify it.

Real estate brokers are independent contractors.

In a principal-agent relationship,the parties agree that the principal will act on behalf and instead of the agent in negotiating and transacting business with third persons.

Without authorization,Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house.Sari ratifies the contract.Later,Sari tries to rescind the part of the contract re-lat-ing to the exterior.This attempt will be

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