Question 1

An agent may make a secret profit from a transaction subject to the agency.

Accepted Answer

A) True 
 B)False

Question 2

An agent is not required to keep which of the following information confidential?

Accepted Answer

A) Unique business methods. 
B) Customer lists. 
C) Information that his or her principal is engaged in criminal activity. 
D) Business plans. 
A) Unique business methods. 
B) Customer lists. 
C) Information that his or her principal is engaged in criminal activity. 
D) Business plans.

Question 3

As a general rule, whatever business activity a person may accomplish personally, he may do through an agent.

Accepted Answer

A) True 
 B)False

Question 4

The only employees who are agents of their employers are those authorized to contract on behalf of their employers.

Accepted Answer

A) True 
 B)False

Question 5

A durable power of attorney is:

Accepted Answer

A) a written instrument that expresses the principal's intention that the agent's authority will become effective upon the principal's subsequent incapacity. 
B) a written instrument that expresses the principal's intention that the agent's authority will not be affected by the principal's subsequent incapacity. 
C) an irrevocable written or oral expression that an agent will have authority to make contracts for and on behalf of the principal. 
D) Both (a) and (b). 
A) a written instrument that expresses the principal's intention that the agent's authority will become effective upon the principal's subsequent incapacity. 
B) a written instrument that expresses the principal's intention that the agent's authority will not be affected by the principal's subsequent incapacity. 
C) an irrevocable written or oral expression that an agent will have authority to make contracts for and on behalf of the principal. 
D) Both (a) and (b).

Question 6

Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a videotape recorder from VideoWorld.The transaction is:

Accepted Answer

A) void because Mark is a minor. 
B) voidable by VideoWorld because Mark is a minor. 
C) voidable by Mark because he is a minor. 
D) not voidable because Joe is not a minor. 
A) void because Mark is a minor. 
B) voidable by VideoWorld because Mark is a minor. 
C) voidable by Mark because he is a minor. 
D) not voidable because Joe is not a minor.

Question 7

In the case of Del Pilar v.DHL Global Customer Solutions (USA), Inc., the court determined that:

Accepted Answer

A) Silver Ink was DHL's employee and, thus, DHL was liable under the doctrine of respondeat superior. 
B) determining the nature of Silver Ink's relationship with DHL was a factual issue inappropriate for summary judgment. 
C) Silver Ink was an independent contractor for whose conduct DHL was not liable. 
D) the descriptive labels employed by the parties are controlling as to whether a person is an employee or an independent contractor. 
A) Silver Ink was DHL's employee and, thus, DHL was liable under the doctrine of respondeat superior. 
B) determining the nature of Silver Ink's relationship with DHL was a factual issue inappropriate for summary judgment. 
C) Silver Ink was an independent contractor for whose conduct DHL was not liable. 
D) the descriptive labels employed by the parties are controlling as to whether a person is an employee or an independent contractor.

Question 8

The duty of obedience owed by an agent to a principal is not breached and will not result in liability to the principal by an agent's refusal to do an illegal or tortious act for the principal.

Accepted Answer

A) True 
 B)False

Question 9

A gratuitous agent is not subject to the same duty of loyalty that is imposed upon a paid agent.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would NOT be considered an agent?
a.A salesman who sells his employer's goods.
b.A manager who hires employees for the store owner.
c.A bus driver in relation to the riders.
d.A buyer who regularly buys merchandise for a store.

Accepted Answer

a.A fiduciary duty is one arising out of

Question 11

A __________ is a formal appointment of an agent.

Accepted Answer

A) fiduciary 
B) revocation 
C) power of attorney 
D) rescission 
A) fiduciary 
B) revocation 
C) power of attorney 
D) rescission

Question 12

The agency relationship involves three basic elements: assent, control by the principal, and the agent's acting on behalf of the principal.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is false with respect to a written agency agreement by an agent to act as the principal's exclusive agent for five years?

Accepted Answer

A) Such an agency is capable of being revoked. 
B) If either party revokes the contract within five years, he will be liable for breach of contract. 
C) The agent has the power to renounce the agreement. 
D) This is an agency coupled with an interest. 
A) Such an agency is capable of being revoked. 
B) If either party revokes the contract within five years, he will be liable for breach of contract. 
C) The agent has the power to renounce the agreement. 
D) This is an agency coupled with an interest.

Question 14

The negligence of an agent who is an employee in conducting the business of the principal exposes the principal to tort liability for injury and loss suffered by third persons.

Accepted Answer

A) True 
 B)False

Question 15

An agency agreement must always be in writing.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained.Edward sells the goods in a market that is glutted and obtains a low price, even though he could have obtained a higher price in a nearby market by using more care in obtaining the available market information.Edward is liable to Diane for breach of the duty of diligence.

Accepted Answer

A) True 
 B)False

Question 18

Agents and principals have mutual fiduciary duties to one another.

Accepted Answer

A) True 
 B)False

Question 19

The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 29: Relationship of Principal and Agent

An agent may make a secret profit from a transaction subject to the agency.

An agent is not required to keep which of the following information confidential?

As a general rule, whatever business activity a person may accomplish personally, he may do through an agent.

The only employees who are agents of their employers are those authorized to contract on behalf of their employers.

A durable power of attorney is:

Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a videotape recorder from VideoWorld.The transaction is:

In the case of Del Pilar v.DHL Global Customer Solutions (USA), Inc., the court determined that:

The duty of obedience owed by an agent to a principal is not breached and will not result in liability to the principal by an agent's refusal to do an illegal or tortious act for the principal.

A gratuitous agent is not subject to the same duty of loyalty that is imposed upon a paid agent.

Which of the following would NOT be considered an agent? a.A salesman who sells his employer's goods. b.A manager who hires employees for the store owner. c.A bus driver in relation to the riders. d.A buyer who regularly buys merchandise for a store.

A __________ is a formal appointment of an agent.

The agency relationship involves three basic elements: assent, control by the principal, and the agent's acting on behalf of the principal.

Which of the following is false with respect to a written agency agreement by an agent to act as the principal's exclusive agent for five years?

The negligence of an agent who is an employee in conducting the business of the principal exposes the principal to tort liability for injury and loss suffered by third persons.

An agency agreement must always be in writing.

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

Agents and principals have mutual fiduciary duties to one another.

The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

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

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

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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