Question 1

Set forth in detail the conditions under which a principal is directly responsible for his or her own tortious conduct.

Accepted Answer

First, a principal who directs the agent

Question 2

When making decisions about an agency relationship's liability to third parties, courts must first identify whether property damage or personal injury, or both, is at issue.

Accepted Answer

A) True 
 B)False

Question 3

If an agent commits a crime in the scope of employment for a principal without the authorization of the principal, the principal is not liable for the agent's crime.

Accepted Answer

A) True 
 B)False

Question 4

According to the text, which of the following are factors considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?

Accepted Answer

A)  Whether the employer authorized the employee's act. 
B)  Whether the employer provided the tools by which the act occurred. 
C)  Whether the employer knew that the act would involve the commission of a serious crime. 
D)  Whether the employee had worked for the employer for a substantial amount of time. 
E)  Whether the employee used force not expected by the employer. 
A)  Whether the employer authorized the employee's act. 
B)  Whether the employer provided the tools by which the act occurred. 
C)  Whether the employer knew that the act would involve the commission of a serious crime. 
D)  Whether the employee had worked for the employer for a substantial amount of time. 
E)  Whether the employee used force not expected by the employer.

Question 5

"Unreliable Boyfriend." Bobby needs a business law book. He hears that Gwen has one for sale. Bobby asks his girlfriend Susie to buy it for him from Gwen if Susie can get it for under $40. Susie sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Susie does not mention that the book is for Bobby although all the parties were on good terms, and the identity of the buyer should not have affected Susie's agreement. Later, however, Polly agrees to give Bobby her used business law book. Bobby tells Susie that he no longer wants the book. Susie tells Gwen about the situation with Bobby. Gwen replies that she does not care if Bobby wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Bobby - she doesn't care who pays.
-Which of the following is true regarding whether Bobby is liable to Susie for the cost of the book if Susie pays Gwen the purchase price?

Accepted Answer

A)  Bobby is liable to Susie for the cost of the book. 
B)  Bobby is liable to Susie for the cost of the book only if Susie had Bobby sign a document affirming his liability before Susie paid Gwen. 
C)  Bobby is liable to Susie only if she resells the book and is unable to recover as much as she paid for it. 
D)  Bobby is not liable to Susie for the cost of the book. 
E)  Bobby can avoid liability to Susie only if he can establish that his actions constituted "justifiable expectations" under the law absolving him from liability. 
A)  Bobby is liable to Susie for the cost of the book. 
B)  Bobby is liable to Susie for the cost of the book only if Susie had Bobby sign a document affirming his liability before Susie paid Gwen. 
C)  Bobby is liable to Susie only if she resells the book and is unable to recover as much as she paid for it. 
D)  Bobby is not liable to Susie for the cost of the book. 
E)  Bobby can avoid liability to Susie only if he can establish that his actions constituted "justifiable expectations" under the law absolving him from liability.

Question 6

Actual notice of agency termination may not be given orally.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true under the UCC regarding liability of a principal if the agent enters into a contract that is a negotiable instrument?

Accepted Answer

A)  The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability. 
B)  The principal cannot be held liable unless the principal's name is on the instrument. 
C)  The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity. 
D)  The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity. 
E)  The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity, or the agent has been ruled insolvent. 
A)  The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability. 
B)  The principal cannot be held liable unless the principal's name is on the instrument. 
C)  The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity. 
D)  The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity. 
E)  The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity, or the agent has been ruled insolvent.

Question 8

An employee's significant deviation from the employer's business is often referred to as a _______.

Accepted Answer

A)  Spree of his own choosing 
B)  Romp against instruction 
C)  Leisure against direction 
D)  Pleasure seeking spree 
E)  Frolic of his own 
A)  Spree of his own choosing 
B)  Romp against instruction 
C)  Leisure against direction 
D)  Pleasure seeking spree 
E)  Frolic of his own

Question 9

Which of the following was the result on appeal in In re Estate of Kurrelmeyer, the case in the text in which the decedent's son sued the wife of the decedent alleging that in violation of the power of attorney that she held, she invalidly transferred the decedent's home into a trust?

Accepted Answer

A)  That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was invalid. 
B)  That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was valid. 
C)  That because the power of attorney did not specifically give the wife the power to transfer property into the trust, the transfer was invalid. 
D)  That based on extrinsic evidence showing the decedent's intent, the power of attorney included the power to transfer the property. 
E)  That based on extrinsic evidence showing the decedent's intent, the power of attorney did not include the power to transfer the property. 
A)  That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was invalid. 
B)  That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was valid. 
C)  That because the power of attorney did not specifically give the wife the power to transfer property into the trust, the transfer was invalid. 
D)  That based on extrinsic evidence showing the decedent's intent, the power of attorney included the power to transfer the property. 
E)  That based on extrinsic evidence showing the decedent's intent, the power of attorney did not include the power to transfer the property.

Question 10

Set forth the rationale behind the doctrine of respondeat superior and discuss whether ethically you believe is an appropriate doctrine for our society.

Accepted Answer

The rationale behind the doctrine is tha

Question 11

List and define the two basic types of power of attorney. Also discuss in what way a durable power of attorney is different from a power of attorney not so designated.

Accepted Answer

A special power of attorney grants the a

Question 12

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee?

Accepted Answer

A)  The employer has no right to receive any reimbursement from the negligent employee. 
B)  The employer has a right to recover only 50% of any amounts paid from a negligent employee. 
C)  The employer has a right to recover all amounts paid from the negligent employee. 
D)  The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
E)  The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
A)  The employer has no right to receive any reimbursement from the negligent employee. 
B)  The employer has a right to recover only 50% of any amounts paid from a negligent employee. 
C)  The employer has a right to recover all amounts paid from the negligent employee. 
D)  The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. 
E)  The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute.

Question 13

When an employee commits a tort within the scope of the agency, which of the following is true regarding liability of a principal who controls the employee's behavior?

Accepted Answer

A)  The employer is liable. 
B)  The employer is not liable because as a matter of public policy, a person is singularly liable for his or her torts. 
C)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least thirty days. 
D)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least seven days. 
E)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least six months. 
A)  The employer is liable. 
B)  The employer is not liable because as a matter of public policy, a person is singularly liable for his or her torts. 
C)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least thirty days. 
D)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least seven days. 
E)  In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least six months.

Question 14

Mary is an agent for ABC Photography, owned by Phil. Without disclosing her agency status, Mary agrees by contract to take Polly's wedding photographs. When Phil finds out, he explains the agency relationship he has with Mary to Polly and says that he wants to take the photographs because a lady he wants to ask out on a date is expected to be at the wedding. When Polly finds out, she says "No way - I choose Mary." Which of the following is true regarding the rights of the parties?

Accepted Answer

A)  Polly has a right to insist that Mary take the photographs because Polly's contract required Mary's services. 
B)  Phil has a right to take the photographs only if his contract with Mary expressly provides that he can take over her photo shoots. 
C)  Phil has a right to take the photographs. 
D)  Phil has a right to take the photographs only if the contract is in an amount over $500. 
E)  Phil has a right to take the photographs unless the contract Mary has with Polly is in writing in which case Polly has the right to insist that Mary take the photographs. 
A)  Polly has a right to insist that Mary take the photographs because Polly's contract required Mary's services. 
B)  Phil has a right to take the photographs only if his contract with Mary expressly provides that he can take over her photo shoots. 
C)  Phil has a right to take the photographs. 
D)  Phil has a right to take the photographs only if the contract is in an amount over $500. 
E)  Phil has a right to take the photographs unless the contract Mary has with Polly is in writing in which case Polly has the right to insist that Mary take the photographs.

Question 15

"The Big Sale." Christy, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Bob was hired by Christy to run a cash register and to assist customers with taking large purchases to their cars. Bob encountered a particularly annoying customer, Frank. Frank started complaining the minute he saw Bob. Frank complained about having to wait for Bob to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Bob tried to control himself while he carted Frank's television to the car. The final straw, however, came when Bob told Frank that he should get the earring out of his ear, cut his hair, and act professionally. Bob threw the television to the ground and punched Frank in the nose. Frank did investigation and discovered that Bob has been fired from his previous three jobs for taking violent action against customers. Two of his former employers are willing to testify that if Christy had called them, they would have disclosed Bob's tendencies to her. Bob listed the former employers on his application, but because she was in a hurry to hire employees, Christy did not take the time to check with the former employers. Another problem confronting Christy during the big sale is that Susie, a long-time employee of Christy who had never caused any problem before, accidentally, but negligently, dropped a box on the foot of Greg, a customer. Greg had to have an X-ray and is threatening to sue both Christy and Susie.
-Which of the following is true regarding Christy's liability, if any, for her own conduct in regards to Frank's injury?

Accepted Answer

A)  Christy would likely be held liable for negligent hiring. 
B)  Regardless of whether she did anything to directly cause injury to Frank, Christy would likely be held liable on a strict liability theory because her customer was injured. 
C)  Christy would likely be held liable for breach of customer warranty. 
D)  Christy would likely be required to split the damages with Bob because Bob was her employee. 
E)  There is no theory on which Christy could be held liable for her own conduct in this situation. 
A)  Christy would likely be held liable for negligent hiring. 
B)  Regardless of whether she did anything to directly cause injury to Frank, Christy would likely be held liable on a strict liability theory because her customer was injured. 
C)  Christy would likely be held liable for breach of customer warranty. 
D)  Christy would likely be required to split the damages with Bob because Bob was her employee. 
E)  There is no theory on which Christy could be held liable for her own conduct in this situation.

Question 16

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Accepted Answer

A)  At any time a principal can revoke an agent's authority. 
B)  A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages. 
C)  An agent can terminate the agency relationship by renouncing the authority given to the agent. 
D)  An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages. 
E)  If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages. 
A)  At any time a principal can revoke an agent's authority. 
B)  A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages. 
C)  An agent can terminate the agency relationship by renouncing the authority given to the agent. 
D)  An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages. 
E)  If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages.

Question 17

Which of the following is true regarding the origin and meaning of the phrase respondeat superior?

Accepted Answer

A)  It is a Latin phrase meaning "release the agent." 
B)  It is a French phrase meaning "agency liability." 
C)  It is a German phrase meaning "liability without fault." 
D)  It is a Latin phrase meaning "let the superior speak." 
E)  It is a French phrase meaning "let the agency stand." 
A)  It is a Latin phrase meaning "release the agent." 
B)  It is a French phrase meaning "agency liability." 
C)  It is a German phrase meaning "liability without fault." 
D)  It is a Latin phrase meaning "let the superior speak." 
E)  It is a French phrase meaning "let the agency stand."

Question 18

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal?

Accepted Answer

A)  The agent is personally liable only if the agent was on a mission for an unidentified principal. 
B)  The agent is personally liable only if the agent was on a mission for an identified principal or a partially disclosed principal. 
C)  The agent is liable regardless of the classification of the principal or the liability of the principal. 
D)  The agent is not liable if the principal is liable. 
E)  The agent is not liable unless the principal is insolvent. 
A)  The agent is personally liable only if the agent was on a mission for an unidentified principal. 
B)  The agent is personally liable only if the agent was on a mission for an identified principal or a partially disclosed principal. 
C)  The agent is liable regardless of the classification of the principal or the liability of the principal. 
D)  The agent is not liable if the principal is liable. 
E)  The agent is not liable unless the principal is insolvent.

Question 19

Which of the following is the most typical way in which to provide constructive notice of agency termination?

Accepted Answer

A)  By telephone 
B)  By letter 
C)  By posting a notice at the courthouse 
D)  By newspaper publication 
E)  By e-mail 
A)  By telephone 
B)  By letter 
C)  By posting a notice at the courthouse 
D)  By newspaper publication 
E)  By e-mail

Question 20

Insolvency of either the principal or agent always terminates the agency relationship.

Accepted Answer

A) True 
 B)False

Exam 34: Liability to Third Parties and Termination

Set forth in detail the conditions under which a principal is directly responsible for his or her own tortious conduct.

When making decisions about an agency relationship's liability to third parties, courts must first identify whether property damage or personal injury, or both, is at issue.

If an agent commits a crime in the scope of employment for a principal without the authorization of the principal, the principal is not liable for the agent's crime.

According to the text, which of the following are factors considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?

Actual notice of agency termination may not be given orally.

Which of the following is true under the UCC regarding liability of a principal if the agent enters into a contract that is a negotiable instrument?

An employee's significant deviation from the employer's business is often referred to as a _______.

Which of the following was the result on appeal in In re Estate of Kurrelmeyer, the case in the text in which the decedent's son sued the wife of the decedent alleging that in violation of the power of attorney that she held, she invalidly transferred the decedent's home into a trust?

Set forth the rationale behind the doctrine of respondeat superior and discuss whether ethically you believe is an appropriate doctrine for our society.

List and define the two basic types of power of attorney. Also discuss in what way a durable power of attorney is different from a power of attorney not so designated.

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee?

When an employee commits a tort within the scope of the agency, which of the following is true regarding liability of a principal who controls the employee's behavior?

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

Which of the following is true regarding the origin and meaning of the phrase respondeat superior?

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal?

Which of the following is the most typical way in which to provide constructive notice of agency termination?

Insolvency of either the principal or agent always terminates the agency relationship.

An Introduction to Dynamic Business Law

Business Ethics

The US Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

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