Deck 14: Agency and the Employment Relationship

Question 1

In an agency the principal:

A)provides the agent with authority
B)provides the agent with legal support
C)does not provide the agent with authority
D)is given authority by the agent
E)none of the other choices are correct

Answer 1

A

Question 2

Through an agency relationship,the agent becomes a representative of the:

A)third party
B)customer or supplier of the principal
C)shareholder
D)all of the other choices
E)none of the other choices

Answer 2

E

Question 3

Someone designated to do all acts that can be legally granted to an agent is called a(n):

A)special agent
B)universal agent
C)general agent
D)subagent
E)gratuitous agent

Answer 3

B

Question 4

Someone designated to do all acts that can be legally granted to an agent is called a(n):

A)special agent
B)gratuitous agent
C)general agent
D)subagent
E)none of the other choices are correct

Question 5

A person designated by a principal to do all acts that can be legally delegated to an agent is a:

A)universal agent
B)special agent
C)gratuitous agent
D)general agent
E)none of the other choices

Question 6

Through an agency relationship,the agent becomes a representative of the:

A)third party
B)principal
C)customer or supplier of the principal
D)shareholder
E)all of the other choices

Question 7

Which of the following is an advantage to having the ability to use agents:

A)access to the expertise of agents
B)reduced tax burden
C)exemption from income tax
D)creation of many small companies within one larger company
E)easier organization of a company

Question 8

Which of the following is an advantage to having the ability to use agents:

A)easier organization of a company
B)reduced tax burden
C)exemption from income tax
D)creation of many small companies within one larger company
E)none of the other choices are correct

Question 9

Which of the following is not a category of agents covered in the text:

A)gratuitous agent
B)special agent
C)universal agent
D)general agent
E)all of the other choices are covered

Question 10

An agency is created when an agent agrees to act for,or in place of,the:

A)third party
B)representative
C)shareholder
D)attorney
E)none of the other choices are correct

Question 11

Which of the following is not a category of agents covered in the text:

A)gratuitous agent
B)special agent
C)foreign agent
D)general agent
E)universal agent

Question 12

In which of the following situations can an agency relationship be created?

A)X hires Y to buy some property on X's behalf
B)X makes an oral agreement that Y will work for X's company as the company's general manager
C)X and Y enter into a written agreement that Y will work for X as the general manager of X's company
D)X hires Y to buy some property on X's behalf and X makes an oral agreement that Y will work for X's company as the company's general manager
E)X hires Y to buy some property on X's behalf and X makes an oral agreement that Y will work for X's company as the company's general manager and X and Y enter into a written agreement that Y will work for X as the general manager of X's company

Question 13

An employment of an agent for the purpose of representation in establishing relations between a principal and third parties is known as a(n):

A)third party relationship
B)principal relationship
C)agency relationship
D)real relationship
E)representative relationship

Question 14

An agent's _________ is the power to change the principal's legal obligations.

A)legal right
B)official power
C)authority
D)responsibility
E)authorization

Question 15

Which of the following is an advantage to having the ability to use agents:

A)expanded business opportunities
B)reduced tax burden
C)exemption from income tax
D)creation of many small companies within one larger company
E)easier organization of a company

Question 16

An agency relationship normally involves the use of an agent to represent a principal in dealing with which of the following:

A)shareholders
B)representatives
C)third parties
D)attorneys
E)ratifications

Question 17

An agent's _________ is the power to change the principal's legal obligations.

A)legal right
B)official power
C)authorization
D)responsibility
E)none of the other choices are correct

Question 18

To carry out their duties,universal agents are typically granted:

A)powers to act by estoppel
B)a general power of attorney
C)authority to cancel contracts anticipatorily
D)all of the other specific choices
E)none of the other choices

Question 19

An agency is created when an agent agrees to act for,or in place of,the:

A)third party
B)principal
C)shareholder
D)attorney
E)representative

Question 20

An employment of an agent for the purpose of representation in establishing relations between a principal and third parties is known as a(n):

A)third party relationship
B)principal relationship
C)representative relationship
D)real relationship
E)none of the other choices are correct

Question 21

A person designated by a principal to do all acts that can be legally delegated to an agent is a:

A)personal subagent
B)special agent
C)gratuitous agent
D)general agent
E)none of the other choices

Question 22

A person who volunteers with no expectation of being paid for her services is a(n):

A)exceptional agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a one-time agent
E)none of the other choices

Question 23

An agent with authority to represent the principal only for a specific transaction,usually for a limited time is a(n):

A)a universal agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a special agent
E)none of the other choices

Question 24

Persons appointed by an agent delegated some authority are known as:

A)minor agents
B)pseudo-agents
C)principal agents
D)delegated agents
E)none of the other choices

Question 25

Carla agrees to try to sell Frank's prize dog Spike for him.Carla does this as a favor to Frank because she knows many professional dog breeders.Carla may be best described as:

A)a universal agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a special agent
E)none of the other choices

Question 26

When an agent pays for the right to have authority for a business,a(n)_____________ is created.

A)agency with coupled with an interest
B)agency with permission
C)agency with rights
D)general agency
E)shared agency

Question 27

An agency coupled with an interest is created:

A)when the principal provides the agent with a general power-of-attorney
B)by an agent who has paid for the right to exercise authority with regard to a business
C)when a person volunteers her services out of interest in the business
D)when the agent is authorized to delegate any authority to an interested party
E)none of the other choices

Question 28

A manager who runs all aspects of a hotel is most likely what kind of agent:

A)universal agent
B)special agent
C)gratuitous agent
D)general agent
E)none of the other choices

Question 29

A manager who runs all aspects of a hotel is most likely what kind of agent:

A)universal agent
B)special agent
C)gratuitous agent
D)subagent
E)none of the other choices

Question 30

You hire an agent to sell your house for you.Typically,such an agent receives a fee only if they actually sell the house.This person is most likely:

A)a universal agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a special agent
E)none of the other choices

Question 31

Persons appointed by an agent delegated some authority are known as:

A)minor agents
B)pseudo-agents
C)subagents
D)delegated agents
E)none of the other choices

Question 32

When an agent pays for the right to have authority for a business,a(n)_____________ is created.

A)shared agency
B)agency with permission
C)agency with rights
D)general agency
E)none of the other choices are correct

Question 33

An agency coupled with an interest is created:

A)when the principal provides the agent with a general power-of-attorney
B)when an agent is hired to work for another agent
C)when a person volunteers her services out of interest in the business
D)when the agent is authorized to delegate any authority to an interested party
E)none of the other choices

Question 34

You hire an agent to sell your house for you.Typically,such an agent receives a fee only if they actually sell the house.This person is most likely:

A)a universal agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a general agent
E)none of the other choices

Question 35

A person who volunteers with no expectation of being paid for her services is a(n):

A)exceptional agent
B)a universal agent
C)an agent who has an agency coupled with an interest
D)a special agent
E)none of the other choices

Question 36

An agent with authority to represent the principal only for a specific transaction,usually for a limited time is a(n):

A)a universal agent
B)a gratuitous agent
C)an agent who has an agency coupled with an interest
D)a one-time agent
E)none of the other choices

Question 37

A person authorized to execute all regular transactions connected with a business is called a:

A)universal agent
B)special agent
C)gratuitous agent
D)general agent
E)none of the other choices

Question 38

A person authorized to execute all regular transactions connected with a business is called a:

A)universal agent
B)special agent
C)gratuitous agent
D)subagent
E)none of the other choices

Question 39

Subagents work for the agent and owe duties to:

A)only the agent
B)only the principal
C)both the agent and the principal
D)no one
E)none of the other choices are correct

Question 40

Carla agrees to try to sell Frank's prize dog Spike for him.Carla does this as a favor to Frank because she knows many professional dog breeders.Carla may be best described as:

A)a universal agent
B)a subagent
C)an agent who has an agency coupled with an interest
D)a special agent
E)none of the other choices

Question 41

To establish an agency relationship:

A)the procedure in state statutes must be followed
B)there must be a written contract between the parties
C)the principal must file an agency charter with the appropriate state agency
D)all of the other specific choices
E)none of the other choices

Question 42

When a principal accepts the consequences of the activities of a person who had previously not been the principal's agent,the principal:

A)exposes the agency
B)reissues the agency
C)delimits the agency
D)cancels the agency
E)none of the other choices

Question 43

An agency may be established by:

A)operation of law
B)oral agreement of the parties
C)written agreement of the parties
D)operation of law or by oral agreement of the parties
E)operation of law or by oral agreement of the parties or by written agreement of the parties

Question 44

To establish an agency relationship:

A)the procedure in state statutes must be followed
B)there must be a written contract between the parties
C)the principal and agent must agree to form an agency
D)all of the other specific choices
E)none of the other choices

Question 45

Many states require agencies that will exist for ____________ to be established in writing.

A)more than one year
B)less than one year
C)less than five years
D)more than six months
E)none of the other choices are correct

Question 46

Agreement of the parties,ratification of the agent's activities by the principal,application of the doctrine of estoppel and operation of law are all:

A)ways that an agency may be established
B)ways that an agency may be sued
C)unacceptable ways to begin an agency
D)informal and thus non-binding ways of establishing an agency
E)none of the other choices are correct

Question 47

Power of attorney:

A)is a document that applies only to attorneys in certain capacities
B)refers to a category of agents
C)is a document that creates an agency
D)exists whenever a person has the right to execute a transaction for another
E)exists whenever an attorney has the right to execute transactions for a client

Question 48

An agency may be established by:

A)operation of the law
B)means of the doctrine of estoppel
C)ratification
D)written agreement
E)any of the other choices

Question 49

A legal document that establishes some agency relationships is known as:

A)articles of incorporation
B)power of attorney
C)partnership agreement
D)decree of guardianship
E)motion to represent

Question 50

The legal document that authorizes a person or a company to act as an agent for a principal is called:

A)power of law
B)power of agency
C)power of attorney
D)power of plaintiff
E)power of principal

Question 51

Many states require agencies for ____________ to be established in writing.

A)sale of boats
B)sale of businesses
C)sale of books
D)sale of livestock
E)none of the other choices are correct

Question 52

You post a notice at school that you will sell your laptop computer for $600.A buyer comes by your room to look at it while you are gone and your roommate sells it for $500,thinking you would be happy with that price,which you did not authorize.

A)you must accept the deal because your roommate had implied authority
B)you must accept the deal because people living together have power of attorney
C)you can accept the deal by express or implied ratification
D)you can accept the deal by express ratification only,not implied ratification
E)the deal cannot be valid because there was no consent

Question 53

A legal document that establishes some agency relationships is known as:

A)articles of incorporation
B)motion to represent
C)partnership agreement
D)decree of business guardianship
E)none of the other choices

Question 54

In most states,which agencies must be in writing:

A)all agencies must be in writing
B)only powers of attorney
C)those that are for the sale of land
D)those granting the agent power to enter into contracts
E)none of the other choices need be

Question 55

For an agency to be valid in most states:

A)there must be written evidence of its creation
B)the agency must be registered
C)the agent must be subject to the principal's control
D)there must be written evidence of its creation and the agent must be subject to the principal's control
E)the agent must be subject to the principal's control and the agency must be registered

Question 56

The legal document that authorizes a person or a company to act as an agent for a principal is called:

A)power of law
B)power of agency
C)power of principal
D)power of plaintiff
E)none of the other choices are correct

Question 57

Many states require agencies for ____________ to be established in writing.

A)sale of boats
B)sale of businesses
C)sale of land
D)sale of livestock
E)sale of books

Question 58

A principal's ratification is:

A)an agent's acceptance of responsibility from the principal
B)the principal's acceptance of responsibility for an agent's activities
C)the principal's rejection of responsibility for an agent's activities
D)the principal's acceptance of property from an agent
E)an agent's acceptance of property from the principal

Question 59

When a principal accepts the consequences of the activities of a person who had previously not been the principal's agent,the principal:

A)ratifies the agency
B)reissues the agency
C)delimits the agency
D)cancels the agency
E)exposes the agency

Question 60

Power of attorney:

A)is a document that applies only to attorneys in certain capacities
B)exists whenever an attorney has the right to execute transactions for a client
C)exists whenever a person has the right to execute a transaction for another
D)is a document that applies only to attorneys in certain capacities and exists whenever an attorney has the right to execute transactions for a client
E)none of the other choices

Question 61

____________ takes place when the principal behaves as if he has the intent of ratifying an unauthorized agreement.

A)implied ratification
B)real ratification
C)delayed ratification
D)express ratification
E)explicit ratification

Question 62

Implied ratification usually occurs when:

A)the principal refuses to accept the benefits of the agreement
B)the principal accepts the benefits of the agreement
C)the agent accepts the benefits of the agreement
D)a court processes the power of attorney
E)none of the other choices are correct

Question 63

To ratify an agreement a principal must know:

A)the important facts of the agreement
B)a general outline of the agreement
C)the name of the agent
D)the agent for at least two years
E)none of the other choices are correct

Question 64

Which of the following would not be a factor in determining a ratification:

A)the principal can ratify only agreements about which he has knowledge of the material facts
B)the agent must have purported to act for of the principal and not on the agent's own behalf
C)the third party wishes for the principal to be a party to a contract
D)if the original agreement between the agent and third party was required by law to be in writing,ratification must also be in writing
E)all of the other choices

Question 65

Implied ratification of an agency occurs when the principal:

A)fails to object to the unauthorized activities of an agent
B)by action shows a clear intent to be bound by unauthorized acts of the agent
C)accepts the benefits of an unauthorized agreement with a third party
D)fails to object to the unauthorized activities of an agent and accepts the benefits of an unauthorized agreement with a third party
E)fails to object to the unauthorized activities of an agent and accepts the benefits of an unauthorized agreement with a third party and by action shows a clear intent to be bound by unauthorized acts of the agent

Question 66

A(n)_________ is a principal's clear signal to be bound to the otherwise unauthorized agreement.

A)implied ratification
B)real ratification
C)delayed ratification
D)explicit ratification
E)none of the other choices are correct

Question 67

Agency by estoppel means:

A)conduct on the part of the agent that implies an agency relationship must be stopped as soon as the principal implies disagreement
B)actions by the principal lead a person to believe that the presumed agent has authority to act on the principal's behalf
C)the agent creates an appearance of authority in the principal which leads a third party to reasonably conclude that the agent has the authority to perform certain acts
D)conduct by the agent through word or actions is not sufficient to bind the principal to contracts the agent creates
E)none of the other choices

Question 68

_____________ is when an agency is created because the actions of the principal may lead one to reasonably believe that the presumed agent has the authority to act for the principal.

A)Agency by estoppel
C)Agency by ratification
D)Agency by demand
E)Agency by practicality
G)Agency by permission

Question 69

____________ takes place when the principal behaves as if he has the intent of ratifying an unauthorized agreement.

A)explicit ratification
B)real ratification
C)delayed ratification
D)express ratification
E)none of the other choices are correct

Question 70

An alleged principal becomes a real principal by:

A)ratifying the agreement
B)refusing to ratify the agreement
C)suing the alleged agent
D)signing the power of attorney
E)signing a contract

Question 71

_____________ is when an agency is created because the actions of the principal may lead one to reasonably believe that the presumed agent has the authority to act for the principal.

A)Agency by practicality
B)Agency by permission
C)Agency by ratification
D)Agency by demand
E)none of the other choices are correct

Question 72

Express ratification creating an agency by the principal occurs when the principal:

A)fails to object to an agent's unauthorized activities
B)by action shows a clear intent to be bound by unauthorized acts of the agent
C)accepts the benefits of an unauthorized agreement with a third party
D)all of the other specific choices
E)none of the other choices

Question 73

A(n)_________ is a principal's clear signal to be bound to the otherwise unauthorized agreement.

A)implied ratification
B)real ratification
C)delayed ratification
D)express ratification
E)explicit ratification

Question 74

Agency by estoppel means:

A)conduct on the part of the agent that implies an agency relationship must be stopped as soon as the principal implies disagreement
B)the principal has ratified actions of the agent in the past,creating the impression of a formal agency
C)the agent creates an appearance of authority in the principal which leads a third party to reasonably conclude that the agent has the authority to perform certain acts
D)conduct by the agent through word or actions is not sufficient to bind the principal to contracts the agent creates
E)none of the other choices

Question 75

An agency through operation of law is established:

A)by a written contractual agreement of the parties
B)by ratification of the agent's activities by the principal
C)by the application of the doctrine of estoppel
D)when an emergency exists and the "agent's" actions are in the public interest
E)none of the other choices

Question 76

Ratification of an agreement that is required by law to be in writing:

A)need not be in writing
B)must be verbal
C)must be witnessed by a court official
D)must be in writing unless both parties agree that it need not be
E)none of the other choices are correct

Question 77

You post a notice at school that you will sell your laptop computer for $600.A buyer comes by your room to look at it while you are gone and your roommate sells it for $500,thinking you would be happy with that price,which you did not authorize.

A)you must accept the deal because your roommate had implied authority
B)you must accept the deal because people living together have power of attorney
C)the deal cannot be valid because there was no consent
D)you can accept the deal by express ratification only
E)none of the other choices

Question 78

Ratification of an agreement that is required by law to be in writing:

A)need not be in writing
B)must be in writing
C)must be witnessed by a court official
D)must be in writing unless both parties agree that it need not be
E)must be verbal

Question 79

Clark,a movie producer,was allowed to work at a movie production company's offices (ITC)out of courtesy.His business card listed the ITC address and his phone calls were handled by ITC staff.In the office,he made a deal to produce a movie for another company.When problems developed and the company,presuming Clark worked for ITC,sued ITC.The court would be likely to hold that ITC:

A)ratified Clark's actions and so became liable for his actions
B)expressly accepted contracts negotiated by Clark,so was liable for the failure to perform
C)had no liability because Clark merely was allowed to use office space at ITC
D)had no liability because Clark had no authority to represent ITC in movie decisions
E)none of the other choices

Question 80

An agency through operation of law is established:

A)by a written contractual agreement of the parties
B)by ratification of the agent's activities by the principal
C)by the application of the doctrine of estoppel
D)when the legislature authorizes an agency
E)none of the other choices