Question 1

In which one of the following situations will a court find that a partnership exists?

Accepted Answer

A) Joe and Mary promote several dances at school and split the profits. 
B) Joe and Mary,while in college,purchase a house and share the profits from the rent after deducting expenses. 
C) Joe,a partner in a law firm,dies and Joe's widow takes over Joe's share of the profits. 
D) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
E) Joe sells his business to Harry for $10,000 for the assets and a further $20,000 for good will,the good will portion to be paid at a rate of 20% of the profits from the business until paid. 
A) Joe and Mary promote several dances at school and split the profits. 
B) Joe and Mary,while in college,purchase a house and share the profits from the rent after deducting expenses. 
C) Joe,a partner in a law firm,dies and Joe's widow takes over Joe's share of the profits. 
D) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
E) Joe sells his business to Harry for $10,000 for the assets and a further $20,000 for good will,the good will portion to be paid at a rate of 20% of the profits from the business until paid. A

Question 2

Paul and Laurie both worked at the mall.They often discussed how frequently they made decisions for customers when helping them pick out gifts.They concluded that knowing the merchandise in all the stores as well as they did,they could make a lot of money by doing Christmas shopping for customers.They discussed the idea at length.Laurie's mom,a buyer for a department store in the mall,referred some customers to them.With more and more customers,they wanted to quit their jobs and devote more time to this new business.Laurie's mom agreed to give them $2000,but doesn't want her liability to go beyond that.On these facts,which of the following is true?

Accepted Answer

A) Laurie's mother cannot be a limited partner because it takes four or more general partners before a firm can have a limited partner. 
B) As long as Laurie's mother does not buy on behalf of the customers hiring Paul and Laurie,she can continue to provide services to them,such as sending them customers,and can advise them on marketing and other management problems without losing her limited-partner status. 
C) If Laurie's mom does not follow the statutory provisions governing limited partnerships,she could be deemed a general partner and liable for claims beyond her $2000 investment. 
D) The only way to limit one's liability is to incorporate. 
E) To protect themselves,all of them should be limited partners. 
A) Laurie's mother cannot be a limited partner because it takes four or more general partners before a firm can have a limited partner. 
B) As long as Laurie's mother does not buy on behalf of the customers hiring Paul and Laurie,she can continue to provide services to them,such as sending them customers,and can advise them on marketing and other management problems without losing her limited-partner status. 
C) If Laurie's mom does not follow the statutory provisions governing limited partnerships,she could be deemed a general partner and liable for claims beyond her $2000 investment. 
D) The only way to limit one's liability is to incorporate. 
E) To protect themselves,all of them should be limited partners. C

Question 3

Explain what is meant by an agent's fiduciary duty.Give three examples of how that fiduciary duty can be breached.

Accepted Answer

Some examples from the text include: must disclose information,not take hidden commissions or kickbacks,always act in the principal's best interests,should not take advantage of opportunities that come through the agency position,must disclose any conflicts,can't act for two principals,can't purchase client's property being sold or sell property to principal without prior disclosure of personal interest,and can't operate in competition with the principal.

Question 4

In which one of the following situations would Sam not be liable for the conduct of his partner,Joe?

Accepted Answer

A) Joe is in a partnership with Sam in a shoe store,and without telling Sam,Joe opens up a franchise of Big Toes Shoes in an adjoining municipality,which suffers a loss. 
B) They made it clear in their partnership agreement that they would not be liable for each other's actions. 
C) Joe,without the knowledge or consent of his partner Sam,purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D) Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E) Joe is in a partnership with Sam and injures a customer while doing partnership business. 
A) Joe is in a partnership with Sam in a shoe store,and without telling Sam,Joe opens up a franchise of Big Toes Shoes in an adjoining municipality,which suffers a loss. 
B) They made it clear in their partnership agreement that they would not be liable for each other's actions. 
C) Joe,without the knowledge or consent of his partner Sam,purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D) Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E) Joe is in a partnership with Sam and injures a customer while doing partnership business.

Question 5

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Accepted Answer

A) Partnership exists where two or more persons carry on business together with a view towards profits. 
B) A partnership exists where any business is carried on with a view towards profits. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists only where two or more people enter into a written agreement to be partners. 
A) Partnership exists where two or more persons carry on business together with a view towards profits. 
B) A partnership exists where any business is carried on with a view towards profits. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists only where two or more people enter into a written agreement to be partners.

Question 6

Which of the following is incorrect with respect to the law of partnership?

Accepted Answer

A) The admission of a new partner requires the consent of all the partners. 
B) All partners have the right to inspect all partnership records. 
C) The death or insanity of one of the partners will dissolve the partnership. 
D) A partnership can always be brought to an end by court order,no matter what the partnership agreement says. 
E) Limited partners are limited in the sense that they cannot take part in the management of the partnership,but otherwise they are like any other partners. 
A) The admission of a new partner requires the consent of all the partners. 
B) All partners have the right to inspect all partnership records. 
C) The death or insanity of one of the partners will dissolve the partnership. 
D) A partnership can always be brought to an end by court order,no matter what the partnership agreement says. 
E) Limited partners are limited in the sense that they cannot take part in the management of the partnership,but otherwise they are like any other partners.

Question 7

Discuss the concept of vicarious liability as it relates to employment and agency law.

Accepted Answer

Vicarious liability is where one person

Question 8

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is correct with respect to the law of partnership?

Accepted Answer

A) All partnerships must be registered. 
B) Partnership is generally a less costly method of carrying on business than incorporation. 
C) All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
D) The partnership relationship is governed by legislation that states that profits and losses are to be shared equally,and this cannot be modified by agreement. 
E) Any major change in the partnership must be made by unanimous agreement,and this cannot be changed by partnership agreement. 
A) All partnerships must be registered. 
B) Partnership is generally a less costly method of carrying on business than incorporation. 
C) All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
D) The partnership relationship is governed by legislation that states that profits and losses are to be shared equally,and this cannot be modified by agreement. 
E) Any major change in the partnership must be made by unanimous agreement,and this cannot be changed by partnership agreement.

Question 10

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

Accepted Answer

This statement is accurate.A p

Question 11

Ratification of a contract can take place by the principal knowingly taking a benefit under the contract.

Accepted Answer

A) True 
 B)False

Question 12

The Partnership Act provides that if the partners do not agree otherwise,certain terms of a partnership agreement will be implied.Which of the following is not such an implied term?

Accepted Answer

A) Each partner shall be responsible for the losses of the firm only to the limit of that partner's initial cash contribution. 
B) Every partner may take part in the management of the partnership business. 
C) No partner is entitled to a wage for acting in the partnership business. 
D) No person may be introduced as a new partner without the consent of all of the existing partners. 
E) The partners will share the profits equally. 
A) Each partner shall be responsible for the losses of the firm only to the limit of that partner's initial cash contribution. 
B) Every partner may take part in the management of the partnership business. 
C) No partner is entitled to a wage for acting in the partnership business. 
D) No person may be introduced as a new partner without the consent of all of the existing partners. 
E) The partners will share the profits equally.

Question 13

Three students in a business faculty created a computer program that compared various retirement plans.They decided to go into business together to offer their services directly to the public.After doing a feasibility study,they felt there were profits to be made.For tax reasons,they decided not to incorporate.Each contributed $15,000 and Wayne,one of the three,contributed a computer.In a short written agreement,they agreed that all three would be actively involved in the management of the business,that all three would work to update the program,that they would share the profits equally,and that they should not be viewed as partners.Based on these facts,which of the following statements is true?

Accepted Answer

A) They are not partners because they do not share profits in proportion to their capital contributions. 
B) They would be considered partners despite their express intention to the contrary in their agreement. 
C) They are not partners unless they realize a profit from their enterprise. 
D) If one partner dies,the partnership would be dissolved even if they state otherwise in their agreement. 
E) If Wayne were to go bankrupt,the partnership would be dissolved even if they state otherwise in their agreement. 
A) They are not partners because they do not share profits in proportion to their capital contributions. 
B) They would be considered partners despite their express intention to the contrary in their agreement. 
C) They are not partners unless they realize a profit from their enterprise. 
D) If one partner dies,the partnership would be dissolved even if they state otherwise in their agreement. 
E) If Wayne were to go bankrupt,the partnership would be dissolved even if they state otherwise in their agreement.

Question 14

Which of the following is correct with respect to the law of partnership?

Accepted Answer

A) A partnership cannot be created inadvertently. 
B) Joint and several liability means that each partner can be sued several times. 
C) Each partner is vicariously liable for the wrongful acts of their partners committed in the course of the partnership business. 
D) Partners are only liable for the torts of their partners if they in fact knew that the wrongful conduct was taking place. 
E) Partners have unlimited liability,meaning that they can lose up to the amount they have invested in the business. 
A) A partnership cannot be created inadvertently. 
B) Joint and several liability means that each partner can be sued several times. 
C) Each partner is vicariously liable for the wrongful acts of their partners committed in the course of the partnership business. 
D) Partners are only liable for the torts of their partners if they in fact knew that the wrongful conduct was taking place. 
E) Partners have unlimited liability,meaning that they can lose up to the amount they have invested in the business.

Question 15

Limited liability can be the most significant disadvantage of the sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 16

Explain how a person's status as a limited partner could be lost.

Accepted Answer

If the limited partner fails to register

Question 17

The unlimited liability of partners means that not only can they lose their entire investment in the business,but their personal assets are also at risk,such as their home and car.

Accepted Answer

A) True 
 B)False

Question 18

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Accepted Answer

A) True 
 B)False

Question 19

A chauffeur,going against specific instructions,purchases a new car on behalf of his employer.The employer has done nothing to lead the seller to believe the chauffeur has authority but is persuaded by the chauffeur to go for a drive before returning the vehicle.Explain the legal position of the parties.

Accepted Answer

Ratification is a two-edged sword,and a

Question 20

Which of the following statements is true with regard to an agent's duties?

Accepted Answer

A) A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B) An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C) An agent cannot act for two principals even with the knowledge and consent of those principals. 
D) An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E) An agent need not disclose all relevant information to the principal. 
A) A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B) An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C) An agent cannot act for two principals even with the knowledge and consent of those principals. 
D) An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E) An agent need not disclose all relevant information to the principal.

In which one of the following situations will a court find that a partnership exists?

Explain what is meant by an agent's fiduciary duty.Give three examples of how that fiduciary duty can be breached.

In which one of the following situations would Sam not be liable for the conduct of his partner,Joe?

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Which of the following is incorrect with respect to the law of partnership?

Discuss the concept of vicarious liability as it relates to employment and agency law.

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Which of the following is correct with respect to the law of partnership?

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

Ratification of a contract can take place by the principal knowingly taking a benefit under the contract.

The Partnership Act provides that if the partners do not agree otherwise,certain terms of a partnership agreement will be implied.Which of the following is not such an implied term?

Which of the following is correct with respect to the law of partnership?

Limited liability can be the most significant disadvantage of the sole proprietorship.

Explain how a person's status as a limited partner could be lost.

The unlimited liability of partners means that not only can they lose their entire investment in the business,but their personal assets are also at risk,such as their home and car.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Which of the following statements is true with regard to an agent's duties?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: The Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence,Professional Liability,and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters

Exam 10: Agency and Partnership

In which one of the following situations will a court find that a partnership exists?

Explain what is meant by an agent's fiduciary duty.Give three examples of how that fiduciary duty can be breached.

In which one of the following situations would Sam not be liable for the conduct of his partner,Joe?

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Which of the following is incorrect with respect to the law of partnership?

Discuss the concept of vicarious liability as it relates to employment and agency law.

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Which of the following is correct with respect to the law of partnership?

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

Ratification of a contract can take place by the principal knowingly taking a benefit under the contract.

The Partnership Act provides that if the partners do not agree otherwise,certain terms of a partnership agreement will be implied.Which of the following is not such an implied term?

Which of the following is correct with respect to the law of partnership?

Limited liability can be the most significant disadvantage of the sole proprietorship.

Explain how a person's status as a limited partner could be lost.

The unlimited liability of partners means that not only can they lose their entire investment in the business,but their personal assets are also at risk,such as their home and car.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Which of the following statements is true with regard to an agent's duties?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: The Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence,Professional Liability,and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters