Deck 5: Agency

Question 1

In all cases,an agency agreement must be written in order to be enforceable.

Answer 1

False

Question 2

An agent is always a fiduciary.

Answer 2

True

Question 3

An independent contractor is also considered an employee of the person for whom work is being done.

Answer 3

False

Question 4

An employee frolic is conduct that is deemed to be outside the scope of employment.

Question 5

An agency agreement can be implied from conduct.

Question 6

There are no limits to the implied authority of an agent.

Question 7

Principals may be held liable for the torts of independent contractors involving highly dangerous acts.

Question 8

Leased workers are precluded from being considered employees of the company for which they are doing work because they are on the payroll of an employment agency.

Question 9

The most common form of agency relationship is employer-employee.

Question 10

An undisclosed principal will be bound by any contract the agent enters into with actual authority.

Question 11

The respondeat superior doctrine typically applies to the actions of independent contractors.

Question 12

A master-servant agency is a type of agency that is illegal.

Question 13

A constructive discharge occurs when an employee in the construction industry is discharged without cause.

Question 14

Implied ratification of an agent's unauthorized acts can occur through the silence of the principal.

Question 15

The person hiring an independent contractor bargains both for the results and the means of achieving the results.

Question 16

The Electronic Signatures in Global and National Commerce Act provides that contracts executed by electronic agents are invalid.

Question 17

The principal has the right to demand reimbursement from the agent for any damages paid to a third party because of an agent's negligence.

Question 18

Agency relationships can be created without a formal agreement.

Question 19

An agent has a duty to act with due care and avoid mistakes.

Question 20

When an act has been ratified,it is then treated as if the principal had originally authorized it.

Question 21

Which of the following is not one of the factors the law looks at in distinguishing between employees and independent contractors?

A)The amount of experience of the worker
B)Whether the work is usually performed by a specialist without supervision
C)Whether the worker is paid hourly or by the job
D)The degree of skill the work requires

Question 22

What did the court in Powell v.MVE Holdings,Inc.,recognize regarding the authority of corporate presidents?

A)That because corporate presidents usually control and supervise a corporation's business,unless there is contrary evidence,contracts made by a corporation's president in the ordinary course of
Business are presumed to be made within the president's authority.
B)That corporate presidents have no authority to take action involving the purchase of stock.
C)That corporate presidents must seek approval from the board of directors for any action that could result in litigation.
D)That corporate presidents corporate presidents must seek approval from the board of directors for any "unusual" action.

Question 23

An ________ occurs if a principal approves or accepts the benefits of the actions of an otherwise unauthorized agent.

A)agency by ratification
B)agency by estoppel
C)agency by independent action
D)agency by intervention

Question 24

Which of the following is true regarding situations in which an agent enters into a contract without authority?

A)The principal is not bound nor is the agent bound.
B)The principal is bound and the agent may be personally liable.
C)The principal is not bound,but the agent may personally liable.
D)Neither the principal nor the agent is bound if the contract is oral; but if the contract is written, both the principal and agent are bound.

Question 25

The most basic legal characteristic of the employer-employee relationship is that the employer has the right to

A)deduct taxes
B)control the conduct of the employee
C)provide health care
D)all of the responses are correct

Question 26

Agency relationships can be formed without agreement by

A)estoppel
B)ratification
C)estoppel and ratification
D)neither estoppel nor ratification

Question 27

Which of the following is true regarding express authority?

A)It may be given by the principal's actual words but not by action.
B)It may be given by written contract only.
C)It may be given by the principal's actual words and also by an action that indicates the principal's consent.
D)It may be given by action but only after a contract of agency has been signed.

Question 28

Once an agent is given express authority,he or she also has _______ authority to do whatever is reasonable to complete the task he or she has been instructed to undertake.

A)implied
B)absolute
C)limited
D)contractual

Question 29

An agent may bind the principal due to the agent's ________ authority.

A)express
B)implied
C)apparent
D)all of the responses are correct

Question 30

Under the duty of ____________ an agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking.

A)loyalty
B)subservience
C)trust
D)obedience

Question 31

Which of the following is false regarding an agency relationship?

A)The most common form of agency relationship is the employer-employee relationship.
B)An agent may not be in independent contractor.
C)An agency agreement may be implied.
D)Agency may be established by estoppel.

Question 32

An agency relationship can be created by

A)an express contract.
B)an implied contract
C)an express contract but not an implied contract
D)an express contract and an implied contract

Question 33

Which of the following terms refers to a slight deviation from the employer's business that is still within the scope of employment?

A)Frolic
B)Detour
C)Errand
D)Chore

Question 34

Which of the following is an example of a hallmark of the fiduciary relationship?

A)Loyalty
B)Subservience
C)Politeness
D)Both loyalty and subservience,but not politeness

Question 35

________ ratification occurs when the principal,by silence or failure to repudiate,acquiesces to the agent's act.

A)Express
B)No
C)Implied
D)None of the responses are correct

Question 36

Which of the following is not usually considered an independent contractor?

A)A delivery driver working for a delivery service
B)A lawyer working for a client
C)A plumber working for a homeowner
D)An architect working for a developer

Question 37

Which of the following is not a duty of an agent to a principal?

A)Loyalty
B)Due care
C)Maximizing profits
D)Obedience

Question 38

For which of the following is employee status,rather than independent contractor status,likely to be found?

A)When a worker is lower paid and less skilled
B)When a worker lacks bargaining power
C)When a worker has a high degree of economic dependence on their employers
D)All the responses are correct

Question 39

Unless state law is to the contrary,an agent may lawfully conceal ________ of the principal.

A)the existence
B)the identity
C)the existence and identity
D)nothing regarding

Question 40

Which of the following is true?

A)A principal cannot be bound on contracts made by an agent if the principal's identity is not disclosed to the third party.
B)A principal cannot through ratification be bound on contracts made by an agent.
C)A principal can be bound on contracts made by an agent even if the principal's identity is not disclosed to the third party.
D)A principal cannot through ratification be bound on contracts made by an agent,and principal can be bound on contracts made by an agent even if the principal's identity is not disclosed to the
Third party.

Question 41

Fact pattern 5-2
Billy owns a used car lot.Samantha works for Billy selling used cars.Billy fully directs and controls her work,sets her hours,and pays her an hourly salary as well as a commission.Belinda comes to the lot to buy a used car.Samantha,however,tells Belinda that she needs to sell her mother's used vehicle and that if Belinda will meet her after hours,she will give Belinda an excellent deal.Belinda meets Samantha after work and ends up buying the car belonging to Samantha's mother.The next day,Samantha is moving a car and negligently backs it over the foot of Wesley another customer.While waiting for the ambulance to come for Wesley,Belinda storms onto the lot complaining about the condition of the vehicle she purchased from Samantha's mother.Billy fires Samantha on the spot.Samantha informs him that she has been an excellent employee and that he has not reason to be unhappy with her.
Refer to fact pattern 5-2.Did Samantha breach any fiduciary duties owed to Billy?

A)Yes,only the duty of loyalty
B)Yes,only the duty of care
C)Yes,both the duty of loyalty and the duty of care
D)No

Question 42

Which of the following is not a factor that the courts will use in determining whether or not an act of an employee was within the scope of employment?

A)Whether the employee's act was authorized by the employer.
B)The length of employment.
C)Whether the employer furnished the instrumentality causing the injury.
D)Whether the employer had reason to know the employee would perform the act.

Question 43

Carl is a contractor that is building a home for Orel.Pam is one of Orel's neighbors.One day Pam was walking in the neighborhood.As she passed the construction site,a piece of lumber fell from the partially finished garage roof and hit her in the head,injuring her severely.The lumber was left negligently on the roof by Carl.Pam now wishes to sue Orel.Should Orel be held liable to Pam? Discuss.

Question 44

A principal may be held liable for the torts of a(n)________ only in extraordinary circumstances,usually involving highly dangerous acts or nondelegable duties.

A)agent
B)servant
C)employee
D)independent contractor

Question 45

Under which of the following circumstances may an employer be liable for an employee's action outside the scope of employment?

A)The employer intended the employee's conduct or its consequences.
B)The employee's high rank in the company makes him or her the employer's alter ego.
C)The employee's action can be attributable to the employer's own negligence or recklessness.
D)All of the responses are correct.

Question 46

Apparent authority may be based on which of the following?

A)Only words of the principal or acts of the principal.
B)Only words of the principal or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time.
C)Words of the principal,acts of the principal,or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time.
D)Express contractual authority only.

Question 47

In agreeing to act on behalf of the principal,the agent becomes a(n)

A)employee
B)independent contractor
C)fiduciary
D)all of the responses are correct

Question 48

Fact pattern 5-2
Billy owns a used car lot.Samantha works for Billy selling used cars.Billy fully directs and controls her work,sets her hours,and pays her an hourly salary as well as a commission.Belinda comes to the lot to buy a used car.Samantha,however,tells Belinda that she needs to sell her mother's used vehicle and that if Belinda will meet her after hours,she will give Belinda an excellent deal.Belinda meets Samantha after work and ends up buying the car belonging to Samantha's mother.The next day,Samantha is moving a car and negligently backs it over the foot of Wesley another customer.While waiting for the ambulance to come for Wesley,Belinda storms onto the lot complaining about the condition of the vehicle she purchased from Samantha's mother.Billy fires Samantha on the spot.Samantha informs him that she has been an excellent employee and that he has not reason to be unhappy with her.
Refer to fact pattern 5-2.Who is liable for Billy's injured foot?

A)Only Billy
B)Only Samantha
C)Both Billy and Samantha with Billy having he right to recover from Samantha any amounts paid
D)Both Billy and Samantha with Samantha having he right to recover from Billy any amounts paid

Question 49

Fact pattern 5-1
Candy owns a nail and hair salon.She reaches an agreement with Todd,an independent contractor,allowing him to do nails in her salon three days per week.Todd has a sign on his desk informing his customers that he is an independent contractor of the shop.After working for a month,Todd asks Candy if she has been paying appropriate social security taxes for him.He also informs Candy that Phyllis,a customer,is preparing to sue both Todd and Candy based upon a nasty nail fungus she developed after having her nails done by Todd.
Refer to fact pattern 5-1.Which of the following is true regarding the duty of Candy,if any,to pay social security taxes for Todd?

A)Candy must pay all of Todd's social security taxes.
B)Candy is responsible for 50% of Todd's social security taxes,and he is responsible for 50%.
C)Candy is responsible for all of Todd's social security taxes only if he works at least 30 hours per week; otherwise,Todd is responsible for all of the taxes.
D)Candy is not responsible for any of Todd's social security taxes.

Question 50

What was the result in Smith v.Sears,Roebuck & Co.,the case in the text involving whether an employer would be held liable under the Fair Credit Reporting Act for its employee's actions in obtaining a consumer credit report for other than permissible purposes?

A)That the employer was liable because it had the primary responsibility for ensuring the sanctity of credit reports.
B)That the employer was strictly liable based on an agency theory.
C)That an employer could never be held liable for such an offense.
D)That under the facts presented,the employer would not be held liable.

Question 51

Agency by estoppel creates an agency relationship where one does not actually exist.What elements are necessary for an agency by estoppel? What are the legal consequences to the principal,agent,and third party? Discuss.

Question 52

Discuss the elements that are considered in determining whether a worker is an employee or an independent contractor.

Question 53

When a third party reasonably believes that the agent has authority to act for and bind the principal,which type of agency authority is created?

A)Express
B)Implied
C)Apparent
D)Fiduciary

Question 54

If an agent enters into an agreement with a third party that must be in writing to be enforceable,then the principal will not be bound unless the agency relationship itself is created by a(n)

A)law
B)writing
C)employment
D)duty

Question 55

Fact pattern 5-1
Candy owns a nail and hair salon.She reaches an agreement with Todd,an independent contractor,allowing him to do nails in her salon three days per week.Todd has a sign on his desk informing his customers that he is an independent contractor of the shop.After working for a month,Todd asks Candy if she has been paying appropriate social security taxes for him.He also informs Candy that Phyllis,a customer,is preparing to sue both Todd and Candy based upon a nasty nail fungus she developed after having her nails done by Todd.
Refer to fact pattern 5-1.Which of the following is true regarding legal responsibility to Phyllis assuming negligence on the part of Todd can be established?

A)Both Candy and Todd are responsible to Phyllis with Candy being primarily responsible meaning that if Todd pays then he can recover any payments from Candy.
B)Both Candy and Todd are responsible to Phyllis with Todd being primarily responsible meaning that if Candy pays then she can recover any payments from Todd.
C)Candy owes 50% of any payments due Phyllis,and Todd owes 50%; but neither Candy nor Todd can recover against the other.
D)Candy does not owe Phyllis any amounts.

Question 56

Agents owe a fiduciary duty to the principal.Describe the specific responsibilities that are generated by this duty.Discuss fully.

Question 57

A plaintiff attempting to hold a company liable for violations of law by it employee even if a manager told the employee not to violate the law would sue under the theory of ______________.

A)vicarious liability
B)constructive liability
C)implicative liability
D)justifiable liability

Question 58

An agency by ________ occurs when a person leads another to believe that someone else is his or her agent and is thereafter prevented from denying it.

A)ratification
B)conduct
C)agreement
D)estoppel

Question 59

Sam is an employee of Binky,Inc.While delivering a truckload of binkies to a local retailer,Sam decided to stop at his bank to deposit his paycheck.The bank is three blocks from the retailer and it takes approximately 15 minutes to deposit a check.While Sam is in the bank,the truck rolled down the street because Sam negligently forgot to set the parking brake.The truck crashed through the window of Market,killing two people and causing $500,000 in damage.Discuss the issues involved in determining whether Binky,Inc.is liable for the damages at issue.If Binky,Inc.is liable,can it recover against Sam for the damages?

Question 60

Maureen owns a business that makes kites.Maureen's agent Bob entered into an agreement with Alice to purchase some land for a new kite factory.Maureen's agency relationship with Bob was not memorialized by any writing.The day after Bob signs the papers finalizing the sale,Maureen learned of the purchase,was furious with Bob,and said that she wanted out of the deal.Assuming that Bob was legally considered the agent of Maureen in making the purchase,which of the following is Maureen's best argument?

A)That the agency agreement with Bob was not in writing and that under the equal dignities rule she should not be bound.
B)That agency agreements may not extend to the purchase of land.
C)That under the exclusion principle,Bob was not authorized to purchase land unless expressly authorized by Maureen.
D)That she did not need land and that therefore she should not be bound because Bob was mistaken.

Question 61

What factors do courts consider in determining whether an act of an agent was within the scope of employment?

Question 62

Describe the circumstances under which an employer may be liable for an employee's actions even if the employee was acting outside the scope of employment.