Deck 15: Agency Law

Question 1

Personnel manuals have been held to constitute an employee contract.

Answer 1

True

Question 2

Ratification requires full knowledge of the transaction.

Answer 2

True

Question 3

An unincorporated association is a group that acts as an entity but has no legal existence.

Answer 3

True

Question 4

In a master/servant relationship, the principal is liable for the torts of the agent committed within the scope of employment.

Question 5

An agency contract must be evidenced by a record to be valid.

Question 6

In an agency relationship, both the principal and agent must have legal capacity.

Question 7

There is no liability of employers for the acts of independent contractors.

Question 8

Implied authority is the extension of express authority by custom.

Question 9

A salesclerk is an agent of a store.

Question 10

Express authority must be in writing.

Question 11

The public policy exception to employment at will does not afford protection for whistle-blowers.

Question 12

Apparent authority and agency by estoppel are the same thing.

Question 13

Principals and agents have a fiduciary relationship.

Question 14

The Restatement of Agency has been adopted in all states.

Question 15

A principal is not liable for an accident caused by its delivery person.

Question 16

An independent contractor is not controlled directly by the principal.

Question 17

The ability of a clerk in a store to accept payment for goods is an example of implied authority.

Question 18

In a master/servant relationship, the principal exercises little control over the agent.

Question 19

A principal cannot ratify an act of an agent retroactively.

Question 20

A real estate agent who fails to disclose his interest as a buyer to his seller principal has violated his duty of loyalty.

Question 21

Respondeat superior is no longer applied in agency relationships.

Question 22

To create an agency relationship, both the principal and agent must have capacity.

Question 23

The intentional torts of agents are never the responsibility of the principal.

Question 24

A power of attorney is an example of an agency relationship.

Question 25

There is no apparent authority in an undisclosed principal relationship.

Question 26

In a fully disclosed principal situation in which the agent is acting with authority, only the principal is liable on the contract.

Question 27

Public notice of termination of an agent is not required.

Question 28

Agents in undisclosed principal situations never have personal liability.

Question 29

Agents can collect payoffs made during the course of conducting the principal's business.

Question 30

Apparent authority ends when an agent is fired.

Question 31

A master-servant relationship is one in which the principal has little control over the agent.

Question 32

Firing an agent does not end apparent authority.

Question 33

Apparent authority ends when an agent quits.

Question 34

The duty of loyalty of an agent to a principal does not cover conflicts of interest.

Question 35

Ratification of a contract by a principal releases the agent from all liability to the third party.

Question 36

A real estate agent who represents both buyer and seller in a transaction without disclosure to both has breached the duty of loyalty.

Question 37

Anti-retaliation statutes are protections for whistle-blowers.

Question 38

Constructive notice of termination of an agent is public notice.

Question 39

The employment-at-will doctrine prohibits the firing of nonunion or noncontract employees.

Question 40

Agents are liable to principals for negligence in performing their duties.

Question 41

Mary Scoot was hired to manage the Cactus Cart, a tiny kiosk located in Sky Harbor Airport in Phoenix. No specific duties were listed, but the business owner who hired Mary told her, "Just sell the plants and deposit the money." Mary would have the implied authority to:

A)take checks as payment.
B)change the business name.
C)sell the kiosk.
D)All of the above

Question 42

If the act of an agent is ratified:

A)there is retroactive authority for the act.
B)the principal has agreed to allow the agent to be liable.
C)the agent then has express authority for that act in the future.
D)None of the above

Question 43

Which is a requirement for the creation of an agency relationship?

A)A written agreement
B)Principal with capacity
C)Agent with capacity
D)None of the above

Question 44

A principal is liable for the torts of an agent committed while the agent is:

A)within the scope of employment.
B)on a frolic.
C)on vacation.
D)None of the above

Question 45

Actual notice occurs when the announcement regarding termination of authority is actually published in a newspaper.

Question 46

There is no employer liability for negligent hiring.

Question 47

Which is not an example of an independent contractor relationship?

A)Master/servant
B)Lawyer/client
C)Accountant/client
D)All of the above are not independent contractors.

Question 48

"Talk to Ann. She doesn't work here anymore, but I think she is the best one to get this deal done for us," is an example of lingering apparent authority given to an agent.

Question 49

A personnel manual:

A)can constitute a contract in an employment-at-will relationship.
B)can disclaim any promises made therein.
C)is never a contract.
D)None of the above

Question 50

The principle is liable for injury caused by his agent during inherently dangerous activities, even if the agent is an independent contractor.

Question 51

The Restatement of Agency :

A)is a summary of the common law agency.
B)has been adopted in all states.
C)is legislative law.
D)None of the above

Question 52

"Talk to Ann. She used to work here, but I think she is the best one to get this deal done for us," is an example of express authority given to an agent.

Question 53

An employee who is asked to take company cash to the bank on his lunch hour is not in the scope of employment during that lunch hour.

Question 54

Real estate agents would not customarily have the authority to enter into sales contracts for their clients.

Question 55

An unincorporated association:

A)has no liability for its members.
B)is not a principal with capacity.
C)can have agents.
D)None of the above

Question 56

Constructive notice occurs when the announcement regarding termination of authority is published in a newspaper.

Question 57

"I'll make good on my employee's promise," is an example of a ratification.

Question 58

Under apparent authority:

A)a principal is never liable for the acts of an agent.
B)a principal is liable for creating the appearance of an agency relationship.
C)there is no agency relationship.
D)None of the above

Question 59

A sales clerk at a department store is an example of an independent contractor.

Question 60

Express authority:

A)must be in writing.
B)can limit the agent's authority.
C)includes customary authority.
D)None of the above

Question 61

To bind the third party, restrictions on an agent's authority must be:

A)known to the third party.
B)in contract form between the agent and principal.
C)in writing.
D)None of the above

Question 62

Independent contractors are:

A)not covered by workers' compensation.
B)covered by workers' compensation when they are working at the site of the employer.
C)entitled to FLSA protections.
D)None of the above

Question 63

In an undisclosed principal situation in which the agent does not have the authority to enter into a contract for real property and does so:

A)only the principal is liable on the contract.
B)the third party can elect to hold the principal or agent liable.
C)only the agent is liable on the contract.
D)None of the above

Question 64

The breach of the fiduciary duty by an agent:

A)results in termination of the agent.
B)terminates the agent's apparent authority.
C)does not terminate an agent's implied authority.
D)None of the above

Question 65

Russ Belmont is a staff accountant at a bank in the downtown Phoenix area. Belmont commutes to the bank each day from his suburban home in Mesa - a distance of 19 miles each way. Belmont's working hours are 8:00 AM to 5:00 PM and he commutes from 7:15 AM until he reaches the bank's parking garage between 7:45 and 8:00 (depending upon the traffic). If Russ is in an accident while on the freeway at 7:30 AM:

A)the bank will be liable for any injuries to third parties.
B)the bank will not be liable for any injuries to third parties.
C)Belmont is an independent contractor and the bank will have no liability for injuries or damages in the accident.
D)None of the above

Question 66

What is the general rule with regard to employer liability for employee accidents occurring while the employee is on the way to work?

A)The employer is generally not liable.
B)The employer is liable unless it furnishes transportation for employees.
C)The employer is liable if the employee is reporting to work early.
D)Both b and c
E)None of the above

Question 67

Lingering apparent authority results from:

A)the failure to give notice of termination.
B)ratification.
C)the lack of capacity on the part of the principal.
D)None of the above

Question 68

Jane and Joseph Sechrist signed a contract to have a swimming pool built in their backyard for $10,000. The salesman for the pool company signed the contract as well on a space marked "Salesperson." Two days after the contract was signed, the salesman called the Sechrists back and asked them to come in and sign a new contract for $11,000 because the vice president had not approved the original price. Jane has checked the contract and discovered that there is no language that requires the approval of anyone other than the salesperson. Jane and Joseph can have their pool built for $10,000 because:

A)the pool company was bound once Jane and Joe signed the contract.
B)the pool company has ratified the contract.
C)of misrepresentation.
D)the salesman had at least apparent authority to bind the pool company.

Question 69

A fiduciary is required to:

A)act in the best interests of the principal.
B)eliminate all risk for the principal.
C)hire a trustee to supervise the funds involved that belong to the principal.
D)None of the above

Question 70

A pizza deliverer who is in an accident while en route to deliver a pizza for a restaurant has:

A)no liability for the accident.
B)the only liability for the accident if he was driving his own car.
C)liability along with the restaurant for the accident.
D)None of the above

Question 71

Gilda Steinforth is a partner in the law firm of Jones, Deloitte & Ernst. A wealthy couple has met with her and asked her to draw up a trust for a portion of their property. They gave Steinforth a check for $10,000 as a retainer fee and a check for $500,000 to begin the trust. Within two days after her meeting with the couple, Gilda and the checks are gone. The couple wishes to recover from Jones, Deloitte & Ernst. Which of the following statements is true?

A)The couple may not recover since Jones, Deloitte & Ernst is not responsible for the intentional torts of its employees.
B)The couple may not recover since Steinforth, as a lawyer, was an independent contractor and not a servant of the firm.
C)The couple may not recover since Steinforth had no express or implied authority to receive the checks.
D)None of the above

Question 72

Jan hires Duncan to act as her agent in acquiring some property for the development of a new subdivision she is planning that will be an elegant planned community. Jan instructs Duncan that he is not to say he is working for her or, for that matter, that he is working for anyone. If Duncan enters into a contract for land for Jan that is the parcel she wanted:

A)Duncan only is liable on the contract for the purchase of the land.
B)Jan can never be held liable for the land because Duncan acted in his name.
C)both Jan and Duncan are liable on the contract for the purchase of land.
D)it is fraud to conceal the identity of a party to a contract.
E)None of the above

Question 73

Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice)but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is true?

A)The firm can ratify Haskin's actions and take over the contract.
B)The firm cannot ratify the contract unless Haskins had express authority to buy land.
C)If the firm ratifies the contract, the effect is that Haskins is released from liability on it.
D)None of the above

Question 74

Firing an agent terminates:

A)express authority.
B)implied authority.
C)apparent authority.
D)a and b only
E)a, b, and c

Question 75

In which of the following situations does the agent have no liability to third parties?

A)A contract entered into with express authority and a fully disclosed principal
B)A contract entered into with no authority but later ratified in full by the principal
C)A contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators
D)The agent has no liability in any of the above.

Question 76

Joe Helquist and Samantha Gillis were partners in the operation of an office supply business for 32 years. Joe had always handled suppliers and Samantha was responsible for running the store and managing employees. Joe decided to retire and Samantha gave him a fine retirement dinner. Joe had some financial setbacks shortly after retirement when his wife became ill and two of his children decided to go on for their masters' degrees. Joe began ordering supplies from the usual suppliers since they were not aware of his retirement. Joe would intercept the supplies at the loading dock and then sell them on his own. Samantha soon caught the discrepancy in the bills and her inventory and refused to pay the suppliers when she learned of Joe's scheme. Which of the following statements is correct?

A)Samantha is not liable to the suppliers since Joe's authority terminated.
B)Samantha is not liable to the suppliers because Joe's acts constituted fraud.
C)Samantha is liable to the suppliers.
D)None of the above

Question 77

In which of the following situations is an agent liable to third parties?

A)In a situation where there is a fully disclosed principal, but only apparent authority
B)In a situation where there is a fully disclosed principal, but only implied authority
C)In a situation where the principal is an unincorporated association
D)All of the above

Question 78

Alan Freeman and Bill Freeman, brothers, operated a residential construction firm. There were three divisions of the firm: single-family homes, townhomes, and custom homes. Alan did not enjoy the demands of custom home buyers and Bill did not enjoy the cookie-cutter work of the other divisions. The brothers agreed to split the business with Bill assuming the responsibilities and contracts of the custom home division and Alan handling the remaining divisions. Alan told Bill he could continue to use the company offices until he was able to find offices of his own. Bill met his clients at the company offices, used the plans of the company and even continued to use the company stationery. Three months later Bill left town, leaving custom homes unfinished and taking the deposits of three customers with him. The customers have sued Alan. Which of the following statements is true?

A)Alan is not liable since the relationship had been terminated.
B)Alan is liable because of apparent authority.
C)Bill is not liable because he was Alan's agent.
D)None of the above

Question 79

Principals are liable for the acts of independent contractors if:

A)the acts are inherently dangerous activities.
B)the independent contractor was negligently hired.
C)Both a and b
D)None of the above

Question 80

The purpose of anti-retaliation statutes is to protect:

A)employers from whistle-blowing employees.
B)government agencies from suit in the event a private employer is investigated because of an employee's claim.
C)whistle-blowing employees.
D)None of the above