Deck 29: Agency Formation and Termination

Question 1

An agent given a power of attorney is known as an attorney-in-fact.

Answer 1

True

Question 2

The principal works on behalf of an agent.

Answer 2

False

Question 3

An orally agreed upon power of attorney is acceptable in court.

Answer 3

False

Question 4

A special power of attorney empowers the agent to act in any matters on the principal's behalf without limitation.

Question 5

Agencies created against public policy are void and unenforceable.

Question 6

If a principal and an agent enter into an express agency contract,the principal cannot employ any agent other than the exclusive agent.

Question 7

Minors can appoint an agent without court approval.

Question 8

A durable power of attorney remains effective even if the principal is incapacitated.

Question 9

An employer-employee relationship when an employer gives an employee authority to act and enter into contracts on his or her behalf.

Question 10

A principal can authorize an independent contractor to enter into contracts.

Question 11

Agency law is a mixture of tort and contract laws.

Question 12

Only a lawyer can become an attorney-in-fact.

Question 13

An express agency contract cannot be orally agreed upon.

Question 14

A general power of attorney limits the agent to those acts enumerated by the agreement.

Question 15

An agent by ratification happens when a principal ratifies an authorized act.

Question 16

For an implied agency to function,implied authority cannot conflict with express authority.

Question 17

In an agency by ratification,the agent is relieved of any liability for misrepresentation.

Question 18

A principal-agent relationship exists when an employer hires an employee to perform some form of physical service.

Question 19

A power of attorney gives an agent the power to sign legal documents on behalf of the principal.

Question 20

The principal is obliged to perform the contract made with a third-party.

Question 21

Any property,money,or other benefit received by the agent in the course of an agency belongs to the principal.

Question 22

The legal rule of imputed knowledge means that the principal is assumed to know what the agent knows.

Question 23

The principal is bound legally to pay a gratuitous agent.

Question 24

Unless mutually agreed by the parties,the termination of an agency coupled with interest requires completion of the agency.

Question 25

An agent who has negligently or intentionally failed to perform his express duties is also liable to torn laws.

Question 26

An agent is not liable to the principal for any injuries resulting from a breach of duty to notify.

Question 27

Constructive notices are not valid against strangers who assert claims of apparent agency.

Question 28

The principal's duty to reimburse says that the principal should pay the agent all expenses prior to start of the agency.

Question 29

An agency coupled with an interest is a special type of agency relationship that is created specifically to benefit the principal.

Question 30

Parties with whom the agent has dealt with directly must be given direct notices of termination of agency.

Question 31

A constructive trust helps the agent retain profits made during the completion of the agency.

Question 32

The outbreak of a war between the principal's country and the agent's country is grounds for terminating an agency.

Question 33

A principal is not bound to contracts made by an apparent agency.

Question 34

If an agency terminates by operation of law,there is no duty to notify third parties about the termination.

Question 35

An agent does not owe a duty to notify the principal of important information he learns concerning the agency.

Question 36

A principal also owes a duty to indemnify the agent for any losses the agent suffers because of the principal's conduct.

Question 37

The bankruptcy of the principal is not a valid reason to terminate an agency.

Question 38

A party who employs another person to act on his or her behalf is known as a ________.

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

Question 39

In a contingency-fee contract,the principal must pay the agent prior to completion of agency.

Question 40

Who is an agent?

A)a party who agrees to act on behalf of another
B)a party who employs another person to act on his or her behalf
C)a party that directs a worker under an express or implied contract of employment
D)a party who receives the services of another for remuneration

Question 41

A(n)________ is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control,and consent by the other so to act.

A)assignment
B)garnishment
C)accommodation
D)agency

Question 42

Which of the following is true of a principal-independent contractor relationship?

A)Principals are bound by the authorized contracts of their independent contractors.
B)Independent contractors cannot be authorized by principals.
C)Independent contractors are employees of the principals.
D)Principals cannot directly employ independent contractors.

Question 43

What role does ReNowait Goodhouses perform?

A)agent
B)independent contractor
C)principal
D)trustee

Question 44

Martin,who wants to sell a house he owns,authorizes his concierge,Wilhelm,to find a potential buyer,and finalize a deal above a stipulated price.Wilhelm contracts Chris,a real estate broker,and intends him to only find a potential buyer and send them over to Wilhelm for the sale.Martin then contracts ReNowait Goodhouses,a home improvement company to renovate the house.ReNowait completes their work and Martin pays them.Chris then searches for a suitable buyer and finds one in George.George buys the house and Chris is paid for his services.
Who is the principal during the land sale transaction?

A)ReNowait Goodhouses
B)George
C)Martin
D)William

Question 45

What role does Chris perform?

A)independent contractor
B)agent
C)principal
D)trustee

Question 46

Marlon intends to sell a piece of real estate he owns and contracts Nita,a real estate broker,to make the sale.In the contract,Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer,makes the sale in time,and is paid by Marlon for her services.
Which of the following types of agency had Marlon and Nita entered into?

A)apparent agency
B)agency by ratification
C)implied agency
D)express agency

Question 47

A(n)________ is a relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

A)agent-independent contractor relationship
B)principal-agent relationship
C)agent-agent relationship
D)employer-employee relationship

Question 48

Which of the following is true of an express agency?

A)The agency involved is allowed to have multiple agents if necessary.
B)The agency is implied from the conduct of the parties.
C)The agency comes to effect when the principal ratifies an unauthorized act.
D)The agency arises when a principal creates the appearance of an agency that does not exist.

Question 49

The agency of power of attorney is an example of a(n)________ agreement.

A)agency by ratification
B)apparent agency
C)express agency
D)implied agency

Question 50

If a person employs an architect to design the layout of his or her own home,it would constitute a(n)________ relationship.

A)employer-employee
B)principal-independent contractor
C)principal-agent
D)agent-independent contractor

Question 51

Marlon intends to sell a piece of real estate he owns and contracts Nita,a real estate broker,to make the sale.In the contract,Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer,makes the sale in time,and is paid by Marlon for her services.
What kind of contract existed between Marlon and Nita?

A)an apparent agency contract
B)a ratified contract
C)an exclusive agency contract
D)an exclusive principal contract

Question 52

Which of the following is true of a general power of attorney?

A)A power of attorney can be oral.
B)Only lawyers can be agents of a power of attorney.
C)A power of attorney cannot be claimed once the principal in incapacitated.
D)It allows the agent to sign legal documents on the principal's behalf.

Question 53

Which of the following types of relationship exists when a person hires another person to perform some form of physical service but does not authorize that person to enter into contracts on behalf his or her behalf?

A)employer-employee relationship
B)employer-agent relationship
C)principal-third party relationship
D)principal-agent relationship

Question 54

Taylor gives a power of attorney to his twin brother Corey,permitting Corey to make all decisions on his behalf while he is abroad.As per the terms of the power of attorney,Corey is allowed make decisions to purchase or sell stocks on Taylor's behalf,sell Taylor's real estate if he deems it to be in Taylor's best interest,pursue or defend lawsuits on Taylor's behalf,and make all other relevant decisions for Taylor.What kind of power of attorney would confer such powers to Corey?

A)a special power of attorney
B)a limited power of attorney
C)an implied power of attorney
D)a general power of attorney

Question 55

Which of the following is true of an employer-employee relationship?

A)An employee has implied power of attorney towards the principal.
B)An employee has authority to act on behalf of the principal.
C)An employee can enter into contracts on behalf of the employer.
D)An employee is hired to perform a task or service.

Question 56

What sort of commercial relationship exists between Martin and William have?

A)employer-employee relationship
B)agent-agent relationship
C)agent-independent contractor relationship
D)principal-agent relationship

Question 57

Martin,who wants to sell a house he owns,authorizes his concierge,Wilhelm,to find a potential buyer,and finalize a deal above a stipulated price.Wilhelm contracts Chris,a real estate broker,and intends him to only find a potential buyer and send them over to Wilhelm for the sale.Martin then contracts ReNowait Goodhouses,a home improvement company to renovate the house.ReNowait completes their work and Martin pays them.Chris then searches for a suitable buyer and finds one in George.George buys the house and Chris is paid for his services.
Who performs the role of the agent in this land sale transaction?

A)Wilhelm
B)Martin
C)Chris
D)George

Question 58

Marlon intends to sell a piece of real estate he owns and contracts Nita,a real estate broker,to make the sale.In the contract,Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer,makes the sale in time,and is paid by Marlon for her services.
An agency that occurs when a principal and an agent categorically agree to enter into an agency agreement with each other is known as a(n)________.

A)agency by ratification
B)implied agency
C)apparent agency
D)express agency

Question 59

Which of the following constitutes an agency?

A)principal-agent relationship
B)agent-agent relationship
C)principal-principal relationship
D)agent-independent contractor relationship

Question 60

Marlon intends to sell a piece of real estate he owns and contracts Nita,a real estate broker,to make the sale.In the contract,Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer,makes the sale in time,and is paid by Marlon for her services.
A(n)________ is a contract a principal and agent enter into that says the principal cannot employ another agent other than the one stated.

A)exclusive principal contract
B)exclusive agency contract
C)ratified contract
D)apparent agency contract

Question 61

________ is a special type of agency that is created for the agent's benefit and that the principal cannot revoke.

A)Agency by ratification
B)Assignment
C)Accommodation
D)Agency coupled with an interest

Question 62

What is imputed knowledge?

A)information collected by a principal prior to engaging in an agency
B)information collected by a principal on an agency
C)information learned by an agent that is attributed to the principal
D)information learned by a principal that is attributed to an agent

Question 63

Which of the following describes an agency by estoppel?

A)an agency that arises when a principal ratifies a contract created by an unauthorized agent
B)an agency created when a principal and an agent expressly agree to enter into an agency agreement
C)an agency that is not expressly stated but is implied and inferred in the conduct of the parties
D)an agency that arises when a principal creates the appearance of an agency that in actuality does not exist

Question 64

The ________ is principal's duty to cover the agent for any losses the agent suffers because of the principal's conduct.

A)duty to cooperate
B)duty to indemnify
C)duty to compensate
D)duty to reimburse

Question 65

A power of attorney where a principal confers powers on an agent to act in specified matters on the principal's behalf is referred to as ________.

A)implied power of attorney
B)general power of attorney
C)limited power of attorney
D)special power of attorney

Question 66

Ashley owns a piece of vacant real estate through which a small river runs.Ashley hires Warren,a licensed real estate broker,to list the property for sale and help sell the property.While inquiring in the neighborhood,Ashley's neighbor Lenny tells Warren that a chemical plant upstream has polluted his property and that Warren should have environmental engineers test the soil on Ashley's property as well.Warren does not tell Ashley about Lenny's suggestion.Warren manages to find a buyer for Ashley's property in Martha.It is later discovered that the property Martha bought from Ashley is also polluted.What important agent's duty has Warren failed to perform?

A)duty to indemnify
B)duty to account
C)duty to reimburse
D)duty to notify

Question 67

Marcus employs a real estate broker,Dean,to sell his house.Dean's express powers are to advertise and market the house for sale,show the house to prospective buyers,and accept offers from persons who want to purchase the house.He is not allowed to seal a deal without Marcus' consent.Marcus goes away on a month-long trip where he cannot be contacted.During this time,a short circuit in the house causes a power outage.Dean uses his authority to hire an electrician to repair the circuits and restore electricity in the house.Marcus then comes back and pays Dean for the electricity repair.What is the nature of the agency that Dean used to fix the electricity problem in the house?

A)implied agency
B)agency by ratification
C)power of attorney
D)express agency

Question 68

A duty that a principal owes to pay an agreed-upon amount to the agent either upon the completion of the agency or at some other mutually agreeable time is known as a principal's ________.

A)duty to reimburse
B)duty to cooperate
C)duty to indemnify
D)duty to compensate

Question 69

Which of the following is true of an apparent agency?

A)The authority of an apparent agent is implied from the conduct of the parties.
B)The third-party is not bound to a contracted created by an apparent agent.
C)The principal is bound to the contracts entered into by an apparent agent.
D)The actions of an apparent agent create an apparent agency.

Question 70

Canton has listed his house for sale,but cannot be present to take care of the sale as he needs to go out of town.He intends to give his brother Stratham the power of attorney to just make decisions regarding selling of his house while he is gone.What kind of power of attorney should Canton execute?

A)a general power of attorney
B)a special power of attorney
C)a limited power of attorney
D)an implied power of attorney

Question 71

Helga owns a piece of real estate.She goes to Stranton Lace Bank to obtain a loan against the property.The bank makes the loan but requires Helga to sign a mortgage pledging the property as collateral for the loan.The mortgage agreement appoints the bank as Helga's agent.If Helga defaults on her payments,the agreement permits the bank to sell the property and recover the amount of the loan from the sale proceeds.What kind of agency exists between Helga and the bank?

A)agency coupled with an interest
B)apparent agency
C)agency by ratification
D)incidental agency

Question 72

An agency by ratification occurs when the principal ________.

A)accepts an unauthorized act created by an unauthorized agent
B)accepts an authorized act created by an authorized agent
C)creates the appearance of an agency that in actuality does not exist
D)accepts an act carried out under the implied authority of an agent

Question 73

Which of the following is true of an agency coupled with an interest?

A)It is created for the benefit of the principal.
B)It is irrevocable by the principal alone.
C)It can be terminated prior to completion of the agency by the principal.
D)It is terminated by the death of either the agent of principal.

Question 74

Which of the following qualifies as termination of an agency by impossibility of performance?

A)the loss of a required qualification
B)the bankruptcy of the principal
C)the insanity of either the principal or the agent
D)the conviction of either the principal or the agent

Question 75

Which of the following is true about a durable power of attorney?

A)It is only effective as long as the principal is able.
B)It remains effective even though the principal is incapacitated.
C)It is effective even when the agency is an oral agreement.
D)It is only effective if the agent is a certified lawyer.

Question 76

Which of the following is true about a special power of attorney?

A)It is an implied form of power of attorney.
B)It limits the agents powers to those enumerated in the agreement.
C)It allows the agent to act in any matters on the principal's behalf.
D)It only allows certified lawyers to be agents.

Question 77

An express agency agreement that is often used to give an agent the control to sign legal documents on behalf of the principal is known as a(n)________.

A)assignment
B)accommodation
C)power of attorney
D)letter of credit

Question 78

Ronald,the purchasing manager of Tellys Supermarket in Georgia,was asked to buy an order of the latest videogame console,FunCase,to keep in the supermarket.However,due to a truckers' strike,he had to make a trip to the FunCase warehouse,which was in Florida.Ronald paid for the trip himself,went to the warehouse,procured the shipment,and returned.After he got back,Tellys Supermarket paid Ronald for the trip he made to Florida.What duty of the principal did Tellys Supermarket perform here when they paid Ronald for the trip to Florida?

A)duty to cooperate
B)duty to reimburse
C)duty to compensate
D)duty to indemnify

Question 79

Frank Hannigan sees a grand piano that his musician friend Scott Kristoff had been looking for in an antique store.Frank enters into a contract to purchase the grand piano from the antique seller and signs the contract,"Frank Hannigan,agent for Scott Kristoff." But because Frank is not Scott's agent,Scott is not bound by the contract.If Scott decides to accept the contract,what kind of agency would be created?

A)express agency
B)implied agency
C)agency by ratification
D)power of attorney

Question 80

An agency that occurs when a principal and an agent do not expressly create an agency,but it is inferred from the conduct of the parties is known as ________.

A)apparent agency
B)agency by ratification
C)implied agency
D)agency coupled with an interest