Question 1

Unless otherwise agreed, authority to manage a business would include authority to do all but which one of the following?

Accepted Answer

A) Make repairs to the broken front door. 
B) Hire employees to help run the shop. 
C) Open a new branch office. 
D) Receive money due to the business. 
A) Make repairs to the broken front door. 
B) Hire employees to help run the shop. 
C) Open a new branch office. 
D) Receive money due to the business.

Question 2

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 3

A person may ratify a prior unauthorized act and may later revoke the ratification.

Accepted Answer

A) True 
 B)False

Question 4

If an agent who has actual authority and receives reimbursement does not tell the third party that he is working in an agency capacity, the principal is still bound.

Accepted Answer

A) True 
 B)False

Question 5

Ratification may relate to acts that have exceeded the authority granted to an agent.

Accepted Answer

A) True 
 B)False

Question 6

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) Both (a) and (c) are correct. 
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) Both (a) and (c) are correct.

Question 7

Jeff is acting as an agent for Tyler.Tyler's liability if Jeff makes an unauthorized tortious misrepresentation:

Accepted Answer

A) depends primarily on whether Jeff is an employee or independent contractor. 
B) exists only if Jeff is an employee and was acting outside the scope of employment. 
C) exists only if Jeff is an independent contractor and Tyler did not intend the misrepresentation. 
D) exists regardless of whether Jeff is an employee or independent contractor and regardless of whether Tyler intended the result of Jeff's misrepresentation. 
A) depends primarily on whether Jeff is an employee or independent contractor. 
B) exists only if Jeff is an employee and was acting outside the scope of employment. 
C) exists only if Jeff is an independent contractor and Tyler did not intend the misrepresentation. 
D) exists regardless of whether Jeff is an employee or independent contractor and regardless of whether Tyler intended the result of Jeff's misrepresentation.

Question 8

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

Accepted Answer

A) True 
 B)False

Question 9

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 10

MATCHING
Part VI Matching
Match each statement with the correct term below.a.The duty that requires an agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions.b.The requirement that an agent maintain and provide the principal with a true and complete account of money or other property that the agent receives or expends on behalf of the principal.c.A consensual relationship authorizing one party to act for and on behalf of another party.d.A person authorized to act on another's behalf.e.The requirement that an agent act with reasonable care and skill in performing the work for which she is employed.f.Written, formal appointment of an agent.g.The requirement that an agent use reasonable efforts to give the principal information that is relevant to the affairs entrusted to her.h.Person who agrees to do a particular job for another but who is not subject to the other's control.i.A form of liability without fault in which the principal is held vicariously liable for the agent's unauthorized tort.j.Authority that is either express or implied and that depends upon consent manifested by the principal to the agent.k.A principal of whom a third party has no knowledge, because he has no reason to believe the agent is acting for a principal.l.Corporation's act of confirming a contract that was made by a promoter before the corporation was formed.m.Power that is based upon acts or conduct of the principal which manifests to a third party that the agent has power and upon which the third party justifiably relies.n.A principal that a third party knows exists but does not know who it is.o.The confirmation or affirmance by one person of a prior unauthorized act performed by another who is, or purports to be, his agent.p.Power inferred from words or conduct that a principal manifests to an agent.
-actual authority

Accepted Answer

The answer of MATCHING
Part VI Matching
Match each statement with the...

Question 11

Which of the following is true with regard to contractual relations between the principal and a third party?

Accepted Answer

A) There is no liability on the part of the principal if the agent acts with implied authority. 
B) An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise. 
C) A principal cannot be bound if the agent acts without any authority. 
D) An unidentified principal is bound only if the agent acts within the scope of actual authority. 
A) There is no liability on the part of the principal if the agent acts with implied authority. 
B) An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise. 
C) A principal cannot be bound if the agent acts without any authority. 
D) An unidentified principal is bound only if the agent acts within the scope of actual authority.

Question 12

MATCHING
Part VI Matching
Match each statement with the correct term below.a.The duty that requires an agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions.b.The requirement that an agent maintain and provide the principal with a true and complete account of money or other property that the agent receives or expends on behalf of the principal.c.A consensual relationship authorizing one party to act for and on behalf of another party.d.A person authorized to act on another's behalf.e.The requirement that an agent act with reasonable care and skill in performing the work for which she is employed.f.Written, formal appointment of an agent.g.The requirement that an agent use reasonable efforts to give the principal information that is relevant to the affairs entrusted to her.h.Person who agrees to do a particular job for another but who is not subject to the other's control.i.A form of liability without fault in which the principal is held vicariously liable for the agent's unauthorized tort.j.Authority that is either express or implied and that depends upon consent manifested by the principal to the agent.k.A principal of whom a third party has no knowledge, because he has no reason to believe the agent is acting for a principal.l.Corporation's act of confirming a contract that was made by a promoter before the corporation was formed.m.Power that is based upon acts or conduct of the principal which manifests to a third party that the agent has power and upon which the third party justifiably relies.n.A principal that a third party knows exists but does not know who it is.o.The confirmation or affirmance by one person of a prior unauthorized act performed by another who is, or purports to be, his agent.p.Power inferred from words or conduct that a principal manifests to an agent.
-apparent authority

Accepted Answer

The answer of MATCHING
Part VI Matching
Match each statement with the...

Question 13

Tom is the promoter of a new corporation that has not yet been incorporated.On behalf of the as yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The corporation is liable on the contract, because Tom is its agent.

Accepted Answer

A) True 
 B)False

Question 14

If an agent tortiously injures a third party, the third party may not hold the principal personally liable.

Accepted Answer

A) True 
 B)False

Question 15

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 16

In the Parlato v.Equitable Life Assurance Society case, the appeals court held:

Accepted Answer

A) the "public notice rule" was binding under the facts of this case. 
B) the principal had a duty to give notice to the third party in this case. 
C) that the principal is responsible for torts its agent or former agent commits against unknown third parties because the principal has the ability to select agents. 
D) under the circumstances of this case, the agent's apparent authority with regard to the third party terminated along with his actual authority when his employment by Equitable ended. 
A) the "public notice rule" was binding under the facts of this case. 
B) the principal had a duty to give notice to the third party in this case. 
C) that the principal is responsible for torts its agent or former agent commits against unknown third parties because the principal has the ability to select agents. 
D) under the circumstances of this case, the agent's apparent authority with regard to the third party terminated along with his actual authority when his employment by Equitable ended.

Question 17

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Accepted Answer

A) True 
 B)False

Question 18

Discuss the requirements and effect of ratification of an agent's acts.

Accepted Answer

Ratification is the confirmation by one

Question 19

Sam is George's agent.George decides to fire Sam.Mel is an old customer of George's and he has dealt on credit with Sam for over 20 years.Ellie is a prospective customer that Sam has spoken with on numerous occasions in his capacity as George's agent, and George was aware of the preliminary negotiations.Mel orders goods from Sam after Sam has been fired but Mel has no knowledge of the firing.Later, Sam takes an order from Ellie.Under the Second Restatement, if George does not give notice of the firing, George will:

Accepted Answer

A) be liable for the contract with Mel. 
B) not be liable on the contract with Mel. 
C) not be liable on the contract with Ellie. 
D) Both (a) and (c). 
E) Both (b) and (c). 
A) be liable for the contract with Mel. 
B) not be liable on the contract with Mel. 
C) not be liable on the contract with Ellie. 
D) Both (a) and (c). 
E) Both (b) and (c).

Question 20

An undisclosed principal may result in which of the following?

Accepted Answer

A) Liability of the agent for any contract made on behalf of such a principal. 
B) The agent's being declared incompetent by a court of law. 
C) A declaration order by the court for the principal to show a guarantee. 
D) All of the above. 
A) Liability of the agent for any contract made on behalf of such a principal. 
B) The agent's being declared incompetent by a court of law. 
C) A declaration order by the court for the principal to show a guarantee. 
D) All of the above.

Exam 30: Relationship With Third Parties

Unless otherwise agreed, authority to manage a business would include authority to do all but which one of the following?

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.

A person may ratify a prior unauthorized act and may later revoke the ratification.

If an agent who has actual authority and receives reimbursement does not tell the third party that he is working in an agency capacity, the principal is still bound.

Ratification may relate to acts that have exceeded the authority granted to an agent.

For a ratification to be effective, the principal:

Jeff is acting as an agent for Tyler.Tyler's liability if Jeff makes an unauthorized tortious misrepresentation:

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

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.

Which of the following is true with regard to contractual relations between the principal and a third party?

If an agent tortiously injures a third party, the third party may not hold the principal personally liable.

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

In the Parlato v.Equitable Life Assurance Society case, the appeals court held:

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Discuss the requirements and effect of ratification of an agent's acts.

An undisclosed principal may result in which of the following?

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 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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