Question 1

Express authority:

Accepted Answer

A)  is created when the principal specifically describes the extent of the agent's powers. 
B)  arises from the principal's failure to inform third persons that the relationship between the principal and the agent is not what it appears to be. 
C)  arises from the justifiable belief of a third party dealing with the agent. 
D)  is created by the conduct of the principal that causes a third person to incorrectly believe that another has the authority to act for the principal. 
A)  is created when the principal specifically describes the extent of the agent's powers. 
B)  arises from the principal's failure to inform third persons that the relationship between the principal and the agent is not what it appears to be. 
C)  arises from the justifiable belief of a third party dealing with the agent. 
D)  is created by the conduct of the principal that causes a third person to incorrectly believe that another has the authority to act for the principal.

Question 2

An agent's exercise of apparent authority,in the absence of actual authority,is in violation of the agent's duty to the principal.

Accepted Answer

A) True 
 B)False

Question 3

The test of an agent's implied authority is:

Accepted Answer

A)  the justifiable belief of the agent. 
B)  the specific language the principal used in granting the authority. 
C)  the explicit agency agreement between the principal and the agency. 
D)  the deduction of the third party dealing with the agent. 
A)  the justifiable belief of the agent. 
B)  the specific language the principal used in granting the authority. 
C)  the explicit agency agreement between the principal and the agency. 
D)  the deduction of the third party dealing with the agent.

Question 4

Misrepresentations by an agent made with the intent to deceive a third person:

Accepted Answer

A)  will make the agent liable to the third person. 
B)  will absolve the principal of any liabilities toward the third person. 
C)  will make the third person liable to the principle. 
D)  will make the principal liable to the agent and the third person. 
A)  will make the agent liable to the third person. 
B)  will absolve the principal of any liabilities toward the third person. 
C)  will make the third person liable to the principle. 
D)  will make the principal liable to the agent and the third person.

Question 5

A principal's intent to ratify a contract:

Accepted Answer

A)  can only be inferred by the agent's actions. 
B)  may not be implied by his acts or failure to act. 
C)  may be inferred by a court from the fact that the agent accepted the benefits of an unauthorized contract. 
D)  may be inferred from the principal's failure to repudiate an unauthorized contract after becoming aware of it. 
A)  can only be inferred by the agent's actions. 
B)  may not be implied by his acts or failure to act. 
C)  may be inferred by a court from the fact that the agent accepted the benefits of an unauthorized contract. 
D)  may be inferred from the principal's failure to repudiate an unauthorized contract after becoming aware of it.

Question 6

Liability is imposed on an agent who has exceeded his authority on the basis of an:

Accepted Answer

A)  implied warranty of authority. 
B)  actual warranty of authority. 
C)  direct warranty of authority. 
D)  definitive warranty of authority. 
A)  implied warranty of authority. 
B)  actual warranty of authority. 
C)  direct warranty of authority. 
D)  definitive warranty of authority.

Question 7

Under the theory of _____ the principal basically is liable because of its own tort.

Accepted Answer

A)  direct liability 
B)  respondeat superior 
C)  joint liability 
D)  vicarious liability 
A)  direct liability 
B)  respondeat superior 
C)  joint liability 
D)  vicarious liability

Question 8

Agents cannot delegate to employees acts for the principal that involve no judgment or discretion.

Accepted Answer

A) True 
 B)False

Question 9

An agent who commits a criminal act under instruction from the principal is guilty of that crime.

Accepted Answer

A) True 
 B)False

Question 10

An agent can exercise his implied authority when:

Accepted Answer

A)  third persons believe that authority exists because past actions of the agent were ratified by the principal. 
B)  the agent is a special agent and not a general agent. 
C)  the principal's property interests need to be protected by the agent during an emergency. 
D)  the principal does not grant the agent any powers. 
A)  third persons believe that authority exists because past actions of the agent were ratified by the principal. 
B)  the agent is a special agent and not a general agent. 
C)  the principal's property interests need to be protected by the agent during an emergency. 
D)  the principal does not grant the agent any powers.

Exam 24: Liability of Principals and Agents to Third Parties

Express authority:

An agent's exercise of apparent authority,in the absence of actual authority,is in violation of the agent's duty to the principal.

The test of an agent's implied authority is:

Misrepresentations by an agent made with the intent to deceive a third person:

A principal's intent to ratify a contract:

Liability is imposed on an agent who has exceeded his authority on the basis of an:

Under the theory of _____ the principal basically is liable because of its own tort.

Agents cannot delegate to employees acts for the principal that involve no judgment or discretion.

An agent who commits a criminal act under instruction from the principal is guilty of that crime.

An agent can exercise his implied authority when:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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