Deck 34: Liability to Third Parties and Termination

Question 1

Vicarious liability is assigned liability without fault.

Answer 1

True

Question 2

There are two basic types of power of attorney: special and allocated.

Answer 2

False

Question 3

In In re Estate of Kurrelmeyer, the case in the text in which the decedent's son sued the wife of the decedent, alleging that in violation of the power of attorney that she held, she invalidly transferred the decedent's home into a trust, which of the following was the result on appeal?

A) That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was invalid.
B) That because no extrinsic evidence existed to clarify the meaning of the power of attorney, the transfer was valid.
C) That because the power of attorney did not specifically give the wife the power to transfer property into the trust, the transfer was invalid.
D) That based on extrinsic evidence showing the decedent's intent, the power of attorney included the power to transfer the property.
E) That based on extrinsic evidence showing the decedent's intent, the power of attorney did not include the power to transfer the property.

Answer 3

D

Question 4

Arun was leaving the country and gave his co-worker Jerome a power of attorney. This is a special type of express agent authority.

Question 5

An agency relationship is always terminated by insolvency on the part of either the principal or agent.

Question 6

Which country is partially influenced by classical Islamic law and suggests that under respondeat superior those who cause harm should repair it?

A) Iraq
B) Iran
C) Afghanistan
D) England
E) France

Question 7

To terminate agency relationships to a third party that have business transactions with the principal, the principal must send written notice by certified mail of the termination.

Question 8

Which of the following represented the position of the Supreme Court of Tennessee in the Case Opener in which the plaintiff attempted to hold a hospital vicariously liable for her injuries?

A) That a defendant in the position of the hospital is vicariously liable for injuries received within its premises without a need for further proof.
B) That because the plaintiff dismissed the hospital's alleged agent from the lawsuit, she could not proceed even though she had sued the hospital before dismissing the agent.
C) That the plaintiff was barred from proceeding because vicarious liability is not recognized in the medical malpractice arena.
D) That the plaintiff could proceed but only because she had already established liability on the part of the physician employees involved.
E) That the hospital could be held vicariously liable if the plaintiff established that a wrongful act harming her occurred within the scope of the agent's employment.

Question 9

Agents who go beyond their authority when the principal is disclosed or partially disclosed are liable to third parties for breach of contract, not breach of implied warranty.

Question 10

Raquel is an agent for Occasion Photography, owned by Luke. Without disclosing her agency status, Raquel agrees by contract to take Ella's wedding photographs. When Luke finds out, he explains the agency relationship he has with Raquel to Ella and says that he wants to take the photographs because a lady he wants to ask out on a date is expected to be at the wedding. However, despite Luke's explanation, Ella still requests that Raquel take her wedding photographs. Which of the following is true regarding the rights of the parties?

A) Ella has a right to insist that Raquel take the photographs because Ella's contract required Raquel's services.
B) Luke has a right to take the photographs only if his contract with Raquel expressly provides that he can take over her photo shoots.
C) Luke has a right to take the photographs.
D) Luke has a right to take the photographs only if the contract is in an amount over $500.
E) Luke has a right to take the photographs unless the contract Raquel has with Ella is in writing in which case Ella has the right to insist that Raquel take the photographs.

Question 11

Courts must first identify whether property damage or personal injury, or both, is at issue when making decisions about an agency relationship's liability to third parties.

Question 12

Actual notice of agency termination must be given to third parties who have had business interactions with an agent in order to fully terminate a principal's responsibility.

Question 13

An employer can hire an independent contractor to complete an inherently dangerous activity to escape liability just in case something goes wrong.

Question 14

A principal is not liable for an agent's crime if the agent commits a crime in the scope of employment for the principal without the authorization of the principal.

Question 15

Constructive notice that an agency relationship has terminated is usually completed by publication.

Question 16

Agent liability not only applies to how an agent treats a customer, they also apply to how the agent treats employees too.

Question 17

When a court considers whether an employee's act occurred within the scope of his or her employment, it considers, among other things, whether the employee used force not expected by the employer.

Question 18

A special power of attorney grants the agent express authority over specifically outlined acts.

Question 19

The principal may terminate an agency coupled with an interest.

Question 20

As discussed in the text, which of the following is true regarding electronic contracts and agency authority in Singapore?

A) In Singapore because of the fear of fraud, agents are not allowed to engage in electronic transactions on behalf of principals.
B) Singapore relies on a type of law similar to U.S. common law in addressing agency authority in regard to electronic transactions.
C) Singapore passed a law providing that a principal must countersign any electronic transaction engaged in by an agent.
D) Singapore passed a law providing that each employer must post a list electronically of all its agents with authority to act on its behalf.
E) Singapore passed a law by which lack of awareness of a principal for an agent's acts is not recognized as a defense.

Question 21

Fellger hired Saul to work for him in his plant nursery. As Saul was watering plants, he pulled hard on the hose causing Jillian, a customer, to fall and injure herself. When a court considers whether or not Fellger would be liable as an employer, the court will see if Saul ________.

A) purposefully tried to injure Jillian.
B) was working within the scope of his employment.
C) allowed Jillian contributed to her own injuries.
D) knew he was being negligent.
E) knew the hose would cause an injury.

Question 22

Pelley gives Jorge a durable power of attorney, this gives Pelley what?

A) authority to continue beyond a principal's incapacitation
B) power of attorney only after Pelley files a bond
C) authority to access bank accounts only
D) authority to buy and sell real estate only
E) the ability to file Jorge's taxes

Question 23

If an agent is acting within his or her authority on a contract involving an undisclosed principal, the agent is ________.

A) liable for the agreement if it is under $5,000.
B) not liable at all for the contract.
C) Liable for the agreement.
D) will split the contract remedy between he principle and agent.
E) will only hold the principal liable.

Question 24

When a principal is classified as a disclosed principal, which of the following is true?

A) The third party is totally unaware that the agent is action for a principal.
B) A third party can sue both the principal and the agent for misrepresentation.
C) A third party is aware that an agent is making an agreement on behalf of a principal, and the third party also knows the identity of the principal.
D) A third party can choose to contract only with the agent instead of the principal.
E) A third party must consult with the principal before agreeing to be bound in any contract.

Question 25

Gladian works as a plumber for Jackson Plumbing. When he is at Smithby's house, he tries to fix the Smithby's satellite dish causing the unit to overheat and causing a fire. What is Jackson Plumbing's best defense regarding liability?

A) Gladian was on a substantial departure
B) Gladian is on minimal departure
C) Gladian is on a half departure
D) Gladian is on an absolute departure
E) Gladian is on an unauthorized departure

Question 26

If a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal, which of the following is true?

A) The agent remains liable to the third party.
B) The agent remains liable to the third party unless the dispute involves an amount less than $1,000 in which case the agent is released.
C) The agent remains liable to the third party unless the dispute involves an amount less than $500 in which case the agent is released.
D) The agent is released from liability to the third party.
E) The agent is released from liability to the third party unless the principal resides in another state and has not paid the judgment within 30 days from when it was rendered.

Question 27

A(n) ________ allows for an agent to conduct all business for the principal.

A) special power of attorney
B) general power of attorney
C) encompassing power of attorney
D) detailed power of attorney
E) employment power of attorney

Question 28

When an agent is an employee and commits a tort, which of the following is true regarding liability of a principal/employer who controls the employee's behavior?

A) The employer can be liable.
B) The employer is not liable because as a matter of public policy, a person is singularly liable for his or her torts.
C) In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least thirty days.
D) In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least seven days.
E) In order to give the employer a chance to evaluate the employee, the employer is liable only if the employee has worked for the employer for at least six months.

Question 29

Kellen is Cronon's hired employee responsible for making sure that deliveries of flowers get to weddings and funerals on time. One afternoon however, after having a fight with his girlfriend, Kellen takes all the flower deliveries to her house as a show of love leaving the wedding party without their flowers. This would be considered:

A) Out on their own
B) Rebelling against the master
C) Pleasure before work
D) Deviation for the employer's needs
E) Frolic of his own

Question 30

In Larry S. Lawrence v. Bainbridge Apartments, the case in the text in which the window washer argued that he was entitled to recover against the building owner for his injuries in a fall, which of the following was the result?

A) The window washer was entitled to workers' compensation as an employee.
B) The window washer was entitled to a recovery in tort based on the inherently dangerous activity at issue and the defendant's failure to take sufficient precautions.
C) The window washer was entitled to recovery for breach of contract.
D) The window washer was not entitled to recover because he took insufficient precautions for his own safety.
E) The window washer was entitled to no recovery based on his status as an independent contractor.

Question 31

Carlos wants to purchase a lot, owned by Sarah, that is next door to Sarah's home. Carlos knows Sarah will not sell the lot to him because of his barking dogs that she dislikes. Carlos agrees with Jasmine that Jasmine will purchase the lot from Sarah for him. Jasmine and Sarah reach an agreement and enter into a contract whereby Sarah is to sell the lot to Jasmine for a price within the scope of Jasmine's authority. Jasmine tells Sarah nothing about her plan to later transfer the lot to Carlos. Before title to the lot is transferred to Jasmine, Carlos tells Jasmine that he no longer wants the lot. Jasmine tells Sarah about Carlos. Sarah tells Jasmine that as far as she is concerned, Jasmine has bought the lot. Sarah says that she plans to move anyway and really does not care whether Jasmine or Carlos ends up with the lot. She just wants her money and is unconcerned about barking dogs, which will be the next owner's problem. Which of the following is true regarding whether Jasmine is personally bound on the contract with Sarah?

A) Jasmine is not personally bound because she was acting on behalf of Carlos.
B) Jasmine is personally bound unless she can establish that Sarah would not have sold her the lot if she had known that Carlos was involved; and the contract is, therefore, void.
C) Jasmine is personally bound unless she can establish that Carlos has the funds with which to pay Sarah.
D) Jasmine is not personally bound unless Carlos has legally filed for bankruptcy.
E) Jasmine is personally bound.

Question 32

The Latin phrase ________ means to "let the superior speak."

A) superior repondeat
B) e pluribis unum
C) In pari delicto
D) respondeat superior
E) pact sunt servende

Question 33

An agent who commits a tort that injures a third party is personally liable for his or her actions, ________.

A) but the principal can also be liable.
B) only if the agent was on a mission for an identified principal or a partially disclosed principal.
C) regardless of both the classification and the liability of the principal.
D) but can also seek indemnification from the principal.
E) only if the principal had the agent sign a waiver.

Question 34

________ deals with the concept of the principal/employer-agent/employee relationship in relation to liability of the principal/employer for acts of the agent/employee.

A) Respondeat Superior
B) Superior Respondeat
C) Stare decisis
D) Res judicata
E) In Pari Delicto

Question 35

Under the UCC, if an agent enters into a contract that is an negotiable instrument, the principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in ________.

A) a representative capacity.
B) the presence of a notary.
C) the presence of the disclosed or undisclosed principal.
D) a bank or an institution that would accept the negotiable instrument.
E) connection with an auxiliary promise to the contract.

Question 36

Delorian hires Tiffany as an independent contractor to perform some restoration work. Delorian indicates that if Tiffany will use poisonous lead paint on the walls, she will pay her double for the job. Would Delorian be liable for a tort?

A) No, because Tiffany is not an employee and should have known better.
B) No, because companies are not liable for acts of an independent contractor.
C) No, because the independent contractor did not have to obey the company.
D) Yes, because Delorian directed Tiffany to commit the tort.
E) Yes, because the company should have known the independent contract would do what it asked.

Question 37

Which of the following is false regarding classification of principals?

A) If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a disclosed principal.
B) When the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is, the principal is a disclosed principal.
C) An unidentified principal is in the same classification as a partially disclosed principal.
D) If the third party does not know that an agent is acting on behalf of a principal, an undisclosed principal is involved.
E) Classification of the principal is important because it helps determine the principal's liability.

Question 38

In the United Arab Emirates (UAE) under both Commercial Transaction Law and UAE Civil code, ________ are entitled to seek compensation in the event of termination.

A) regular agents
B) special agents
C) government officials
D) independent contractors
E) unregistered agents

Question 39

If an agent has no authority to act on behalf of a principal, but the agent still enters into a contract with a third party, the principal is not bound unless ________.

A) the principal ratifies the agreement.
B) the principal is an unidentified principal.
C) the principal is a partially disclosed principal.
D) the principal is expressly barred from disaffirming the agreement.
E) a court finds that principal should be bound.

Question 40

If an agent makes a contract with a third party that expressly excludes the principal from the contract, which statement effectively describes the liability of the principal?

A) The principal is liable on the contract because it is unconscionable to exclude a principal from a contract.
B) The principal is liable on the contract only if the principal is an unidentified principal.
C) The principal is liable on the contract only if the principal is a partially disclosed principal.
D) The principal is liable on the contract unless the principal gave the agent authority in writing to make the agreement with the third party.
E) The principal is not liable on the contract.

Question 41

In Doe v. Uber Technologies, Inc. the case in the text in which two victims sued Uber Technologies alleging separate sexual assaults on rides they received from Uber drivers and whether or not those drivers were employees or independent contractors. The court held that:

A) That Uber drivers are independent contractors who do not hold the same status as an employee for purposes of vicarious liability.
B) That the assault occurred outside the scope of employment so that Uber was allowed to dismiss the case.
C) That although the assault did not occur within the scope of the driver's employment, Uber was vicariously liable for the act because the assault was criminal nature.
D) That even though the Uber drivers are considered independent contractors, Uber can still be vicariously liable because Uber knew of the criminal act but did nothing.
E) For the purpose of surviving a motion to dismiss, plaintiffs had plausibly alleged that the Uber drivers were acting within the scope of employment when they assaulted plaintiffs.

Question 42

________ usually consists of publication in a generally circulated newspaper in the area where the agency agreement actually existed.

A) Special notice
B) Analytical notice
C) Postdated notice
D) Constructive notice
E) Personal notice

Question 43

If a manager has business transactions in one of the European Union countries and wants to terminate an agency relationship, he or she would want to have access to knowledge about which of the following?

A) Chapter IV of the Agency Relationship Law
B) Chapter VII of the Employment Relationship
C) Article VI of the European Union Regulations
D) Article VII of the European Union Regulations

Question 44

Which of the following is true regarding notice of termination of an agency relationship?

A) Notice of termination of an agency relationship must be given by actual notice.
B) Depending on the circumstances, notice of termination can be actual or constructive.
C) Notice of termination of an agency must be given in writing.
D) Actual notice of termination of an agency relationship is not needed once 30 days have passed since the termination because at that point notice is presumed.
E) Actual notice of termination of an agency relationship is not needed once 60 days have passed since the termination because at that point notice is presumed.

Question 45

If an agency relationship is made specifically with the agent, not the principal in mind, this is known as an ________.

A) agency for an agent
B) agency coupled with an interest
C) agency benefitting the agent
D) agency compensation principle
E) agency entitlement principle

Question 46

If a principal notifies a third party that an agency relationship has ended, at what point does that authority end?

A) It ends immediately
B) 24 hours
C) 48 hours
D) 7 days
E) 10 days

Question 47

________ holds the principal-employer liable for any harm caused by the agent-employee during the time that the agent-employee is working for the principal.

A) Negligence
B) Absolute liability
C) Vicarious liability
D) Contributory liability
E) Strict liability

Question 48

According to the text, which of the following is not a factor considered by courts in determining whether an act committed by an employee occurred within the course and scope of employment?

A) Whether the employer authorized the employee's act.
B) Whether the employer provided the tools by which the act occurred.
C) Whether the employer knew that the act would involve the commission of a serious crime.
D) Whether the employee had worked for the employer for a substantial amount of time.
E) Whether the employee used force not expected by the employer.

Question 49

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee?

A) The employer has no right to receive any reimbursement from the negligent employee.
B) The employer has a right to recover only 50% of any amounts paid from a negligent employee.
C) The employer has a right to recover all amounts paid from the negligent employee.
D) The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute.
E) The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute.

Question 50

Daphne was working for Barrett at his jewelry store. She was asked to deliver a piece of jewelry to a homebound client for Barrett. When she was leaving the store, she backed into a customer who was pulling into he parking lot. Barrett had to pay $3,000 to the customer due to Daphne's negligence. Barrett could seek ________ from Daphne for the injuries she caused.

A) reimbursement
B) indemnification
C) indemnitee
D) retainers
E) proceeds

Question 51

While making a delivery, Elliott, a delivery driver for Sira's Sandwiches, went through the drive through at a local restaurant to get a cup of coffee and bumped into the car in front of him resulting in some damage to the car's bumper. Which of the following is true regarding the liability of Sira's Sandwiches for the damage to the car?

A) As a matter of law, Sira's Sandwiches is not liable because Elliott was acting on his own behalf.
B) As a matter of law, Sira's Sandwiches is not liable because only property damage is involved.
C) As a matter of law, Sira's Sandwiches is liable because a company is liable for any torts committed by an employee during working hours.
D) Whether or not Sira's Sandwiches is liable depends on whether Elliott's acts are seen as substantial departure from his work.
E) Whether or not Sira's Sandwiches is liable depends on how long Elliott has worked for the company.

Question 52

If an independent contractor is engaged in ________ for the principal, the principal will be responsible for any damages by the independent contractor

A) extremely hazardous activities
B) normal activities
C) reasonable activities
D) purposeful activities
E) negligent activities

Question 53

[Textbook Confusion] Jason needs a business law book. He hears that Gwen has one for sale. Jason asks his girlfriend Sakura to buy it for him from Gwen if Sakura can get it for under $40. Sakura sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Sakura does not mention that the book is for Jason, although all the parties were on good terms, and the identity of the buyer should not have affected Sakura's agreement. Later, however, Rima agrees to give Jason her used business law book. Jason tells Sakura that he no longer wants the book. Sakura tells Gwen about the situation with Jason. Gwen replies that she does not care if Jason wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Jason - she doesn't care who pays.
Which of the following is true regarding whether Jason is liable to Sakura for the cost of the book if Sakura pays Gwen the purchase price?

A) Jason is liable to Sakura for the cost of the book.
B) Jason is liable to Sakura for the cost of the book only if Sakura had Jason sign a document affirming his liability before Sakura paid Gwen.
C) Jason is liable to Sakura only if she resells the book and is unable to recover as much as she paid for it.
D) Jason is not liable to Sakura for the cost of the book.
E) Jason can avoid liability to Sakura only if he can establish that his actions constituted "justifiable expectations" under the law absolving him from liability.

Question 54

An agency relationship may be terminated in several ways for a variety of reasons. Which of the following is not one of these reasons?

A) Insolvency of the principal
B) Occurrence of a specific event
C) Revocation of authority
D) Fulfillment of purpose
E) Renunciation by the agent

Question 55

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
Which of the following is true regarding Simone's liability, if any, for her own conduct in regards to Ryan's injury?

A) Simone would likely be held liable for negligent hiring.
B) Regardless of whether she did anything to directly cause injury to Ryan, Simone would likely be held liable on a strict liability theory because her customer was injured.
C) Simone would likely be held liable for breach of customer warranty.
D) Simone would likely be required to split the damages with Jamal because Jamal was her employee.
E) There is no theory on which Simone could be held liable for her own conduct in this situation.

Question 56

[Textbook Confusion] Jason needs a business law book. He hears that Gwen has one for sale. Jason asks his girlfriend Sakura to buy it for him from Gwen if Sakura can get it for under $40. Sakura sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Sakura does not mention that the book is for Jason, although all the parties were on good terms, and the identity of the buyer should not have affected Sakura's agreement. Later, however, Rima agrees to give Jason her used business law book. Jason tells Sakura that he no longer wants the book. Sakura tells Gwen about the situation with Jason. Gwen replies that she does not care if Jason wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Jason - she doesn't care who pays.
Which of the following is true regarding whether Sakura is personally bound on the contract with Gwen?

A) Sakura is not personally bound because she was acting on behalf of Jason.
B) Sakura is personally bound unless she can establish that Gwen would not have sold her the book if she had known that Jason was involved.
C) Sakura is personally bound unless she can establish that Jason has the funds with which to pay Gwen.
D) Sakura is not personally bound unless Jason is legally insolvent.
E) Sakura is personally bound.

Question 57

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent?

A) At any time a principal can revoke an agent's authority.
B) A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages.
C) An agent can terminate the agency relationship by renouncing the authority given to the agent.
D) An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages.
E) If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages.

Question 58

Which statement is false regarding termination of agency based on operation of law?

A) Impossibility of performance terminates the agency relationship.
B) An agency agreement is terminated whenever the agent, unknown to the principal, acquires an interest against the principal's interest.
C) The agency agreement is terminated if the agent breaches the duty of loyalty he or she has to the principal.
D) A change in law passed subsequent to the formation of an agency agreement may not result in termination of the agency agreement.
E) If there is an unusual change in circumstances that leads the agent to believe that the principal's instructions do not apply, the agency relationship terminates.

Question 59

[Textbook Confusion] Jason needs a business law book. He hears that Gwen has one for sale. Jason asks his girlfriend Sakura to buy it for him from Gwen if Sakura can get it for under $40. Sakura sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Sakura does not mention that the book is for Jason, although all the parties were on good terms, and the identity of the buyer should not have affected Sakura's agreement. Later, however, Rima agrees to give Jason her used business law book. Jason tells Sakura that he no longer wants the book. Sakura tells Gwen about the situation with Jason. Gwen replies that she does not care if Jason wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Jason - she doesn't care who pays.
When Sakura and Gwen enter their agreement, what type of principal is Jason?

A) Disclosed
B) Undisclosed
C) Partially disclosed
D) Unidentified
E) Legally nonexistent

Question 60

Which of the following is false regarding termination of agency in the Netherlands?

A) The agent is entitled to compensation if his or her duties are concluded within a reasonable time after termination.
B) Compensation is due if the agent received the orders for a certain action before the termination of the contract.
C) The agent is entitled to goodwill compensation in certain situations.
D) An agent is not entitled to additional compensation based on bringing the principal new customers or because agreements with clients obtained by the agent remain profitable.
E) There are requirements on the agent in regard to time limits in filing for certain compensation.

Question 61

A ________ power of attorney grants an agent express authority over specific outlined acts, in contrast to a ________ power of attorney, which grants an agent authority to conduct all business for the principal.

A) Special; durable
B) Special; general
C) General; durable
D) Durable; general
E) Durable; special

Question 62

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
Which of the following is true regarding whether Greg has any right of recovery against Simone for his injured foot?

A) Greg has no right of recovery against Simone because Lea had not dropped any boxes before, and Simone had no reason to suspect she would injure Greg.
B) Greg has a right of recovery against Simone only if Lea is insolvent.
C) Greg has a right of recovery against Simone, but only for 50% of his damages.
D) Greg has no right of recovery against Simone unless he is able to establish wrongdoing on her part in hiring Lea.
E) Greg has a right of recovery against Simone.

Question 63

[Beach Home] Wendy hires Rob to find and negotiate a price for her perfect vacation home. Rob previously helped Wendy find a home and Wendy was very satisfied with his service. Wendy had many demands for her dream vacation home and told Rob that each demand was nonnegotiable. Wendy desired her home to have five bedrooms, seven bathrooms, a large master suite with a balcony, a pool house, and she wanted the property to be within a block of the beach. Rob informed Wendy this was a high demand and he was not confident he could find a property that met all of Wendy's requirements within her price range. Wendy thought Rob was underestimating himself and told him that she was not willing to budge. Rob finds a home that meets all of her requirements, except it is five blocks from the beach. Rob informed the seller he was working on behalf of a principal and the property met all of her requirements. Rob negotiates an outstanding price and is excited to share it with Wendy. Rob tells Wendy about the stellar price and Wendy is devastated that the property is not in her defined location. She immediately calls the seller to rescind the offer but the seller declines, stating the offer is binding because as the seller knew, Rob had authority to contract and the seller was not aware of Wendy's requirements.
What is Wendy's best cause of action?

A) Wendy should sue the seller for breach of implied warranty.
B) Wendy should sue Rob for breach of implied warranty.
C) Wendy should sue the seller for breach of contract.
D) Wendy should sue Rob for breach of contract.
E) Wendy does not have a valid cause of action against the seller or Rob.

Question 64

Which of the following is not a way an agency relationship will terminate by acts of the parties?

A) Fulfillment of purpose
B) Change in circumstances
C) Mutual agreement by the parties
D) Renunciation by the agent
E) Agency coupled with interest

Question 65

When would an agent who breaches his or her agreement be liable for a breach of implied warranty?

A) When the principal is undisclosed.
B) When the principal is partially disclosed.
C) When the principal is disclosed.
D) When the principal is disclosed or partially disclosed.
E) When the principal is partially undisclosed.

Question 66

The text discussed the case of Aguas v. State of New Jersey, where the New Jersey Supreme Court addressed a correctional officer's hostile work environment claim in which she alleged that she had was sexually harassed by her supervisor on several occasions. Which of the following was the result?

A) The employer was not liable because it had an anti-discrimination policy in place.
B) The plaintiff successfully stated her claim for hostile work environment and was granted a $1,000,000 award in damages.
C) The case was dismissed because the employer launched a thorough internal investigation, which revealed no harassment had occurred.
D) The case was dismissed because there was an anti-discrimination policy in place, the employer conducted a thorough investigation of the claims, and there was no evidence the alleged harassment derived from the supervisory relationship.
E) The employer was liable because it failed to look into applicants' background before hiring.

Question 67

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers, telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
If Jun pays for the damage to Gina's car, does he have any remedy against Connor?

A) If Jun covers Gina's damages, then Jun may receive full reimbursement from Connor based upon the right of indemnification.
B) If Jun covers Gina's damages, then Jun is not entitled to any reimbursement from Connor.
C) If Jun covers Gina's damages, Jun is only entitled to reimbursement from Connor for 50% of whatever he paid.
D) Any recovery Jun receives from Connor will be based upon principles of comparative negligence.
E) Any recovery Jun receives from Connor will be based upon principles of contributory negligence.

Question 68

Which type of liability applies when engaging in activities that have an inherently dangerous nature?

A) Misrepresentation liability
B) General liability
C) Strict liability
D) Special liability
E) Vicarious liability

Question 69

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers, telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
Which of the following is true regarding Jun's liability to Tomás?

A) Jun will likely be held liable for Tomás's injuries because while Connor was acting outside the scope of his duties at the time of the accident, he had not substantially departed from the course of his employer's business.
B) Jun will likely be held liable for Tomás's injuries because Connor was driving Jun's truck at the time of the accident.
C) Jun will likely be held liable for Tomás's injuries because Jun allowed Connor to take the truck home regardless of Jun's instructions regarding the use of the truck.
D) It is unlikely that Jun will be held liable for Tomás's injuries because Connor had substantially departed from the course of his employer's business.
E) It is unlikely that Jun will be held liable for Tomás's injuries unless it can be proven that Connor had no insurance and lacks the ability to pay.

Question 70

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
Which of the following is true regarding whether Greg has any right of recovery against Lea for his injured foot?

A) Greg has no right of recovery against Lea because of her status as an employee.
B) Greg has no right of recovery against Lea because she did not intentionally harm him.
C) Greg has a right of recovery against Lea only if Simone cannot be located for service of process.
D) Greg has a right of recovery against Lea only if Simone is bankrupt.
E) Greg has a right of recovery against Lea.

Question 71

[Beach Home] Wendy hires Rob to find and negotiate a price for her perfect vacation home. Rob previously helped Wendy find a home and Wendy was very satisfied with his service. Wendy had many demands for her dream vacation home and told Rob that each demand was nonnegotiable. Wendy desired her home to have five bedrooms, seven bathrooms, a large master suite with a balcony, a pool house, and she wanted the property to be within a block of the beach. Rob informed Wendy this was a high demand and he was not confident he could find a property that met all of Wendy's requirements within her price range. Wendy thought Rob was underestimating himself and told him that she was not willing to budge. Rob finds a home that meets all of her requirements, except it is five blocks from the beach. Rob informed the seller he was working on behalf of a principal and the property met all of her requirements. Rob negotiates an outstanding price and is excited to share it with Wendy. Rob tells Wendy about the stellar price and Wendy is devastated that the property is not in her defined location. She immediately calls the seller to rescind the offer but the seller declines, stating the offer is binding because as the seller knew, Rob had authority to contract and the seller was not aware of Wendy's requirements.
If Wendy refuses to compensate Rob for his services rendered, what would be the result it Rob sued Wendy for unpaid wages?

A) Wendy would prevail because she did not authorize Rob to extend an offer.
B) Wendy would prevail because Rob exceeded his authority in the transaction.
C) Wendy would prevail because Rob should sue the seller, not Wendy.
D) Rob would prevail because Wendy owed him money for services rendered.
E) Rob would prevail because he negotiated a vacation home for Wendy that met most of her requirements.

Question 72

What type of principal exists when his or her identity is not known and the third party is not aware that the agent is making an agreement on behalf of the principal?

A) Partially disclosed principal
B) Identified principal
C) Disclosed principal
D) Partially identified principal
E) Undisclosed principal

Question 73

The text discussed the case of Dunkley v. S. Coraluzzo Petroleum Transporters, where the New Jersey Appellate Court addressed an employer's liability for the harassing conduct of its supervisor. Which of the following was the result?

A) The employer was not vicariously liable because it maintained a handbook of anti-discrimination policies and complaint methods, provided it to employees upon hire and directed them to become familiar with the information provided, and took steps to prevent plaintiff from further harassment.
B) The employer was not vicariously liable because it fired the supervisor.
C) The plaintiff was successful because the employer did not have any policies in place to prevent the harassment that occurred and the employer did not take steps to prevent the harassment once it became aware.
D) The plaintiff was successful because the employer could not prove its employees were aware or should have been aware of its policies.
E) The plaintiff was successful because the employer admitted it knew the supervisor harassed the plaintiff but failed to take action.

Question 74

What is the rationale behind vicarious liability?

A) Under the time and place theory, the employee would not have caused harm at that exact time and place had it not been for the employer.
B) The employer benefits from the work of the employee, therefore, the employer should also be responsible for any harm the employee caused.
C) The employer did know or should have known his or her employee would cause harm.
D) The employer typically has more money to pay for the harm.
E) The employer should have better hiring practices.

Question 75

The text discussed the case of Burlington Industries, Inc. v. Ellerth, where the U.S. Supreme Court addressed workplace harassment and defined two ways an employer may be liable for torts of its employees while acting outside the scope of employment. Which of the following is one of those ways?

A) The employer knew or should have known of the employee's harm and failed to stop it.
B) The employer outsourced its human resources overseas and failed to follow traditional U.S. human resources procedures.
C) The employer failed to conduct a semi-annual training on appropriate workplace behavior.
D) The employer failed to monitor its employees.
E) The employer had bad hiring practices.

Question 76

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?

A) The defendant was not held liable because it had no reason to know a former employee was stealing from its clients.
B) The defendant was not held liable because the former employee's act exceeded the scope of his employment.
C) The defendant was not held liable because the plaintiff should have known the employee was no longer employed by the defendant.
D) The defendant was held strictly liable because the nature of the acts involved were inherently dangerous.
E) The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated.

Question 77

Which type of liability does a principal have when it authorizes an agent to engage in an act and the agent intentionally or unintentionally falsifies his or her role?

A) Misrepresentation liability
B) Vicarious liability
C) Ratification liability
D) General liability
E) Strict liability

Question 78

Which of the following is not a way an agency relationship will terminate by operation of law?

A) Death
B) Bankruptcy
C) Impossibility
D) Lapse of time
E) War

Question 79

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers, telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
Which of the following is true regarding any liability Jun has to Beth?

A) Jun has no liability to Beth.
B) Jun has liability to Beth under the theory of misrepresentation but only if Hae is insolvent.
C) Jun is liable to Beth under the theory of negligence.
D) Jun is liable to Beth for only 50% of any damages she can prove.
E) Jun is liable to Beth under the theory of misrepresentation.

Question 80

What type of principal exists when his or her identity is not known but the third party is aware that the agent is making an agreement on behalf of the principal?

A) Partially disclosed principal
B) Identified principal
C) Disclosed principal
D) Partially identified principal
E) Undisclosed principal