Deck 25: Nature and Creation of an Agency

Question 1

Limitations upon an agent's authority can bind a third party who does not know of them. ​

Answer 1

False

Question 2

​ Which of the following statements is true of contracts of agency?

A)The legal requirements to be an agent are the same in all states.
B)Corporations cannot act as agents in contracts of agency.
C)Every agent must possess a valid license authorizing the agent to act as one.
D)All people legally competent to act for themselves may act through an agent.

Answer 2

D

Question 3

The general principles of law pertaining to contracts govern the relation creating an agency. ​

Answer 3

True

Question 4

Which of the following tasks cannot be delegated to an agent? ​

A)Voting in a public election
B)Contracting to purchase business supplies
C)Signing a business merger
D)Publishing a report on a company

Question 5

One who contracts with an independent contractor has more control over the performance of the work than does an employer. ​

Question 6

Which of the following statements best defines a power of attorney? ​

A)It is a written instrument indicating how a person's property is to be divided in the event of his or her death.
B)It is a written instrument indicating the appointment of an agent for the performance of certain tasks.
C)It is the power conferred by a court on a party to manage the financial affairs of another.
D)It is a document that confers the rights of ownership of certain property to another.

Question 7

Which of the following is true when a person hires an independent contractor to perform some tasks?

A)The contract creates a principal-agent relationship.
B)The contractor is responsible for the proper performance of the contract.
C)The person hiring the contractor retains the right to control how the independent contractor performance the terms of the contract.
D)The person hiring the contractor is liable for any injuries the contractor causes to third parties.

Question 8

One contracting with an independent contractor may be held liable for any injuries the contractor negligently causes to third parties. ​

Question 9

Which of the following is true when a person wants to ratify the unauthorized acts of an assumed agent? ​

A)The one attempting to ratify must have been capable of authorizing the act at the time the act was done.
B)The one attempting to ratify need not be capable of authorizing the act at the time approval of the act is given.
C)It is permissible for the one attempting to ratify to approve part of the act and reject the rest.
D)The ratification cannot be made before the third party has withdrawn from the transaction.

Question 10

An assumed agent who acted without actual or apparent authority can still bind a supposed principal.

Question 11

A special agent is one who is authorized to carry out all of the principal's business of a particular kind.

Question 12

Which of the following statements best defines customary authority? ​

A)It is the authority specifically delegated to an agent by the agreement creating the agency.
B)It is the authority to act on behalf of another that arises when such agents ordinarily possess such powers.
C)It is the authority to do things not specifically listed in a contract so that the purpose of the agency can be fulfilled.
D)It is the authority that an agent is believed to have because of the principal's behavior.

Question 13

A contract negotiated by an agent usually involves at least three parties. ​

Question 14

The law requires that only persons with sufficient intelligence to carry out a principal's orders may be appointed to act as an agent. ​

Question 15

The creation of an agency may be executed through an informal contract. ​

Question 16

​ Can anyone become an agent? Explain the requirements one needs to become an agent.

Question 17

Brokers are also known as commission merchants. ​

Question 18

A(n)is one authorized to carry out all of the principal's business of a particular kind.

A)special agent
B)factor del credere
C)general agent
D)commission merchant

Question 19

A general agent may transact any business of a particular kind.

Question 20

A contract of agency may be oral when:

A)the agency is created to transfer title to real estate.
B)the agent's authority extends for more than one year.
C)the agent is to execute a bond.
D)the agent is to be a special agent.