BLAW Chapter 14

Employment-at-will means that, unless a contract holds otherwise, employers are free to fire workers at any time for any reason and employees are free to quit their jobs at any time for any reason.

True

When an agent pays for the right to exercise authority for a business, there is an agency coupled with an interest.

True

____ 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 b. Agency by permission c. Agency by ratification d. Agency by demand e. Agency by practicality

a. Agency by estoppel

A real estate agent is an example of a(n): a. agent b. employee c. employee with agency powers d. independent contractor e. agent and independent contractor

a. agent

An employer should be cautious about hiring persons with criminal backgrounds that mean they could pose a threat to others as the employer could be liable for unauthorized torts that occurred on the job.

True

An express contract for certain terms of employment can restrict employment at-will.

True

An express ratification takes place when the principal gives a clear signal to be bound by an action that would otherwise be unauthorized.

True

An implied ratification takes place when the principal behaves as if she has the intention of ratifying an unauthorized agreement.

True

An independent contractor is not an employee of the person who hires her.

True

An independent contractor is usually not an agent of the principal who hired her, but can have that role too.

True

An undisclosed principal is a principal whose identity is unknown to the third party with whom the agent is involved.

True

Apparent authority arises when the principal creates an appearance of authority in an agent that leads a third party to conclude that the agent has authority to act for the principal.

True

Destruction of the subject matter of an agency ends an agency relationship.

True

Employers may wish to state that employee handbooks are not binding contracts.

True

Geary was fired by his supervisor for revealing to higher management a serious problem with a company product. He sued for wrongful dismissal. You would expect the court held that Geary's dismissal was proper under employment-at-will despite his good motives.

True

If Hilda volunteers to sell Heidi's horse for her, because Hilda knows lots of potential buyers, and Heidi agrees, Hilda is a gratuitous agent.

True

If a hurricane is coming and you spend $800 to buy supplies to protect your neighbor's house against storm damage, when they are gone and cannot be reached, you may have created an agency by operation of law.

True

If a principal behaves as if he intended to ratify an unauthorized agreement between his agent and a third party, a court will find that implied ratification has occurred.

True

If an American company sends an American employee to work in its office in France, the employee may be under French employment law.

True

If an agency relationship did not establish a rate of compensation for the duties of the agent, the principal must pay the "customary" rate for such services.

True

If an agent commits a tort outside the agent's scope of employment, the agent is liable to the third party for damages incurred.

True

If someone volunteers to act as a gratuitous agent, and performs a task, such as selling a car, for a principal, the legal consequences are the same as if the agent were paid.

True

If you hire a builder to build a home, he is likely an independent contractor for you

True

In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held that his employer, Wardley, was liable for breach of fiduciary duty.

True

In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held that his employer, Wardley, was liable for his actions because it failed to monitor Gritton's improper actions sufficiently.

True

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC was liable as it had given Galgano apparent authority to make the lease.

True

In France v. Southern Equipment, where a worker was seriously hurt on a roofing job, the courts held that the owner of the building being roofed was not responsible for the injury suffered by an employee of an independent contractor doing the roof work.

True

In Guz v. Bechtel National, where Guz was fired after many years of good work at Bechtel, the California supreme court held that his tenure at the company did not affect the right of the company to dismiss him without good cause.

True

In Town Center Shopping Center v. Premier Mortgage, a manager of a mortgage company was held to have apparent authority when she entered into a lease for office space, even though she did not have authority to commit her company to that.

True

In Yin v. J's Fashion Accessories, the court found that Yim was an undisclosed agent for his company, Hosung, but was liable for debts owed by Hosung, the principal.

True

In Yin v. J's Fashion Accessories, the court stated that in most cases if an agent makes a contact without identifying his principal, the agent incurs personal liability for the contract.

True

In an emergency, when someone acts on behalf of someone else in order to avoid a loss, the law may create an agency by operation of law.

True

Many courts hold employee handbooks may create contractual obligations between employers and employees.

True

Principals have an obligation to reimburse their agents for their normal business expenses related to the agency, unless otherwise agreed.

True

Principals may be bound by the unauthorized acts of agents if the agent appears to third parties to have the authority to act.

True

Ratification is an affirmation by the principal of an unauthorized agreement by a person acting as an agent with a third party.

True

Traditionally, employees did not act as agents for their principals, but today employees may well also be agents.

True

When a principal's conduct appears consistent with the existence of an agency relationship, an agency by estoppel may be created.

True

When an agent has the power to do whatever is reasonable and customary to carry out the agency purpose, the agent has implied authority.

True

When an agent is allowed to delegate duties to other agents, the other agents are subagents who assist the agent.

True

When an agent is authorized to execute all transactions connected with a business, the person is a general agent.

True

A(n) ____ is one whose identity is unknown by the third party at the time when a contract is entered into with an agent. a. undisclosed principal b. disclosed principal c. specific principal d. legitimate principal e. clear principal

a. undisclosed principal

Which of the following is a common problem with employee handbooks: a. using boilerplate forms that include material not relevant to the employer b. putting a bold disclaimer at the front of the handbook that says it is not a contract c. requiring employees to sign a statement indicating that they have read the disclaimer that says the handbook is not a contract d. all of the other specific choices are correct e. none of the other specific choices are correct

a. using boilerplate forms that include material not relevant to the employer

Compared to the United State, the European Union has: a. very strict data privacy rules b. not very strict data privacy rules c. no data privacy rules d. data privacy rules that apply only to employers, but not employees e. none of the other choices are correct

a. very strict data privacy rules

When liability is imposed on the principal for the unauthorized torts of an agent, it is called: a. vicarious liability b. indemnification c. agent respondeat d. third-party rights, duties, and liabilities e. none of the other choices

a. vicarious liability

In the European Union the regulation governing which country's laws apply to an employment law contract involving multiple nationalities is known as: a. Greece 1 b. Rome 1 c. European Union 1 d. European Employment Law Regulation e. none of the other choices are correct

b. Rome 1

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

c. the agent must be subject to the principal's control

When an agency is terminated: a. the agent's authority to act for the principal does not end b. the agent's authority to act for the principal ends c. the agent's authority to act for the principal is reduced to very limited conditions d. the agent may never work with the principal again e. the agent may not work for someone who is in competition with the principal

b. the agent's authority to act for the principal ends

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

c. both the agent and the principal

The independent contractor is distinguished by: a. the extent of the compensation b. the extent of control the employee retains over work performance c. the extent of control the employer retains over work performance d. all of the other specific choices are correct e. none of the other specific choices are correct

c. the extent of control the employer retains over work performance

When liability is imposed on an employer for a tort committed by an employee, the liability is based on the rule of law known as: a. contractor liability b. tortious liabilitius c. respondeat superior d. principal duty e. there is no such rule as the employee only is responsible

c. respondeat superior

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

c. sale of land

Which of the following can determine the scope of authority given to an agent: a. statements of the agent b. the principal's personal relationship with a third party c. statements of the principal d. all of the other specific choices are correct e. none of the other specific choices are correct

c. statements of the principal

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

c. subagents

An agency ends without any action by the principal or the agent through: a. termination through action b. termination through inaction c. termination by operation of law d. termination by decision of law e. termination by redefinition

c. termination by operation of law

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

c. the agent accepts the benefits of the agreement

Which of the following is least likely to be an issue in determining if an employer has hired an employee or an independent contractor: a. the specialization or skill of the occupation b. the length of the employment c. the level of compensation d. the nature of the worker's tasks e. where the work is performed

c. the level of compensation

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

c. the principal and agent must agree to form an agency

Which of the following can determine the scope of authority given to an agent: a. statements of the agent b. the principal's personal relationship with a third party c. the principal's conduct d. all of the other specific choices are correct e. none of the other specific choices are correct

c. the principal's conduct

An agency may not be ended by: a. unilateral notice by the agent b. unilateral notice by the principal c. mutual consent by agent and principal d. lapse of agreed-upon time e. all of the other choices may end an agency

e. all of the other choices may end an agency

An independent contractor: a. by law may not serve as an agent for the same employer b. is not liable for torts committed in the course of employment c. may not make contracts on behalf of an employer d. may not work more than one month in any year for one employer e. none of the other choices

e. none of the other choices

An undisclosed principle is: a. known to the agent b. unknown to the agent c. known to third parties to contracts entered into with the agent d. known to partners e. none of the other choices

e. none of the other choices

Bill is an attorney in Ohio. Marla hires Bill to create a trust for her children. Bill has not been keeping up with developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much more beneficial trust. In this case, Bill: a. has violated a duty of loyalty b. has violated a duty to account c. has violated a duty of obedience d. may be out-of-date but has violated no duties e. none of the other choices

e. none of the other choices

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

e. none of the other choices

Express authority consists of the agent's: a. inability to conduct business for the principal b. ability to mingle his funds with those of the principal c. ability to withhold services in the event of nonpayment by the principal d. ability to hold power of attorney for the principal e. none of the other choices

e. none of the other choices

When a principal creates an impression of authority in an agent that leads a third party to conclude that the agent has authority to act for the principal, the agent is said to have: a. implied authority b. express authority c. legalized authority d. actual authority e. none of the other choices

e. none of the other choices

When liability is imposed on the principal for the unauthorized torts of an agent, it is called: a. fiduciary duty b. indemnification c. agent respondeat d. third-party rights, duties, and liabilities e. none of the other choices

e. none of the other choices

When you go on vacation you give your neighbor authority to pick up your mail and watch for burglars for you. You tell the neighbor not to go into the house or let anyone else in. A fire on the hills threatens your house. The neighbor goes in to carry out valuables before the house burns. This action is: a. a trespass, which is illegal b. breaking and entering, which is a crime c. an agency by estoppel d. an agency by implied ratification e. none of the other choices

e. none of the other choices

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

e. none of the other choices

____ 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

e. none of the other choices are correct

____ 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

e. none of the other choices are correct

Principals are presumed to have a duty to cooperate with their agents.

True

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

a. access to the expertise of agents

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

a. expanded business opportunities

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

a. universal agent

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

c. agency relationship

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

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices are correct

A check-out clerk at the grocery store is typically in a master-servant relationship, not an agency relationship.

True

Power of attorney is based on a legal document.

True

Power of attorney is given to an agent called an attorney-in-fact.

True

Some state courts hold that employment contracts contain implied covenants of good faith and fair dealing.

True

The agency relationship is a key part to most business operations.

True

The death of a principal would affect the validity of contracts then made by the agent for the principal.

True

The rule of law imposing vicarious liability on an innocent principal for the torts of an agent is respondeat superior.

True

The two general classifications of authority an agent can possess are actual authority and implied authority.

True

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

a. provides the agent with authority

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

d. general agent

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

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

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

e. all of the other choices are covered

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

e. none of the other choices are correct

Someone designated to do all acts that can be legally granted to an agent is called a: a. special agent b. gratuitous agent c. general agent d. subagent e. none of the other choices are correct

e. none of the other choices are correct

Agency relationships may be based on an oral agreement.

True

An employer could be liable for acts of an employee based on negligent hiring.

True

European nations generally have more detailed rules regarding employees than does the U.S.

True

If an agent is discovered to be representing conflicting interests, she has violated her duty of loyalty.

True

In the case of an undisclosed principal, a third party is unaware of the identity of the principal as well as the existence of an agency relationship.

True

A company hired independent contractors to sell their products door-to-door. One sales rep, who had a criminal history, assaulted a customer, who sued the parent company. You would expect the court to hold the company liable for negligence.

True

A general power of attorney is usually given to a universal agent.

True

A major duty of principals to their agents is to indemnify them under most circumstances for liabilities incurred in completing the purpose of the agency.

True

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

c. third parties

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

d. general agent

An employment of an agent for the purpose of representation in establishing relations between a principal and third parties is known as a: a. third party relationship b. principal relationship c. representative relationship d. real relationship e. none of the other choices are correct

e. none of the other choices are correct

A senior manager at a car dealership is likely both an agent and employee.

True

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

True

An auctioneer who sells goods is likely an agent and independent contractor.

True

An employer could be liable for sexual harassment by an employee using social media improperly in the workplace.

True

An employer held responsible for the torts of an employee is said to have vicarious liability.

True

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

c. authority

Agents have a duty of obedience to their principals, which means that if the agent ignores the principal's instructions, she violates her duty.

True

Agents have a fiduciary duty to their principals.

True

Agents have no obligation to engage in activity on behalf of principals that could lead to personal liability.

True

An agency relationship may terminate by lapse of time.

True

An agency that is for the sale of land usually must be evidenced by a written contract.

True

An agency that is to last more than one year usually must be evidenced by a written contract.

True

An agent has a duty to notify his principal of all facts relevant to the purpose of the agency.

True

A person appointed by an agent to help the agent for certain specific transactions is a special agent.

True

A principal held responsible for the torts of an agent is said to have vicarious liability.

True

A principal is contractually liable to a third party if that party enters into a contract presented by an agent with apparent authority to act for the principal.

True

A principal may designate someone to do all acts that can be legally delegated to an agent. That agent is called a universal agent.

True

A principal's major reason for developing agency relationships is to expand business opportunities.

True

A real estate agent who sells a house on commission is an agent, not an employee of the home owner.

True

A stocker in a grocery store is an employee but not an agent for the store.

True

Actual authority involves powers given by the principal to the agent.

True

Agencies may be terminated by operation of law, without either party taking any action.

True

When an employer-employee relationship exists, employers: a. may be liable for the torts committed by employees in the course of employment b. are only liable for the torts committed by employees in the course of employment in some states c. are never liable for the torts committed by employees in the course of employment d. are liable for the torts committed by employees in the course of employment only if the employees are minors e. none of the other choices are correct

a. may be liable for the torts committed by employees in the course of employment

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

a. more than one year

If a person could be expected to possibly cause problems and an employer hires them anyway, the employer could be held liable for ____ if the employee commits a tort against a customer. a. negligence in hiring b. irreverence in hiring c. irresponsibility in hiring d. lack of foresight in hiring e. lack of care in hiring

a. negligence in hiring

An employee of a company, who has good technical knowledge, is concerned that some televisions made by the company may have electrical shorts that could cause fires. Since no one in the company would address the problem, the employee provides evidence of the problem to the media and state attorney general, so consumers can be aware of the problem. If the employee is fired he is unlikely to have: a. a case against the company b. a case against the company unless he was an independent contractor c. a case against the company unless he was a general agent d. a case against the company unless he was a servant e. a case against the company unless an injury does occur to a consumer, in which case the firing will be illegal

a. a case against the company

The authority given by the principal to an agent, conferring on the agent the power and right to change the principal's legal status is referred to as: a. actual authority b. authority in rem c. authority at law d. general authority e. special authority

a. actual authority

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

a. agency with coupled with an interest

A key element of an agency relationship is: a. an agent's ability to transact business for the principal b. any relationship established for the sale of land be an oral contract c. the principal acts for the benefit of the agent d. a commitment for at least one year, to show intent to bind the parties to the agency relationship e. none of the other choices

a. an agent's ability to transact business for the principal

If an employer and employee agree on employment of a certain time, or that job security will be provided, then there is likely: a. an express contract b. an implied contract c. an implied covenant of good faith d. nothing more than employment at-will e. none of the other choices

a. an express contract

In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house from her and then cheated her on the transaction, the court held that: a. both Wardley and Gritton owed Bearden fiduciary duties and so both were liable b. neither Wardley nor Gritton owed Bearden fiduciary duties and so neither was liable c. only Wardley owed Bearden fiduciary duties and so only Warden was liable d. only Gritton owed Bearden fiduciary duties and so only Gritton was liable e. none of the other choices are correct

a. both Wardley and Gritton owed Bearden fiduciary duties and so both were liable

If a company manager expressly tells an employee that she could not be fired without good cause, but then fires her for no particular cause, the employee may have a suit for wrongful termination most likely based on the theory of: a. breach of implied contract b. breach of public policy c. breach of employment manual d. breach of a public right e. none of the other choices; the employee has no grounds for suit due to employment at will

a. breach of implied contract

Which of the following is not a duty owed by the agent to the principal: a. compensation b. reasonable care c. accounting d. notification e. all of the other choices are required

a. compensation

If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the principal must pay the agent: a. for the reasonable value of the services provided b. at least half the customary rate c. for the rational value of the services provided d. however much the agent demands e. however much the agent's attorney demands

a. for the reasonable value of the services provided

In Guz v. Bechtel National, where Guz was fired after 22 years good service in a personnel cutback and sued for breach of implied contract and covenant of fair dealing, the California high court held that Guz: a. had no suit against his employer b. had a suit only for breach of implied contract to be terminated for good cause c. had a suit only for breach of implied covenant of fair dealing d. had a suit for both breach of implied contract and of implied covenant e. none of the other choices

a. had no suit against his employer

If a contractor does not have authority to enter into contracts for the principal then: a. he is not an agent b. he is also an agent c. he is also an agent if he thinks he has the authority to enter into contracts d. he is still considered an agent in most, but not all, states e. none of the other choices are correct

a. he is not an agent

If an agent competes with his principal without the principal's consent: a. he is violating his duty of loyalty b. he is violating his duty of cooperation c. he is violating his duty to reimburse d. he is violating his duty to play fair e. he is violating his duty of obedience and performance

a. he is violating his duty of loyalty

____ 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

a. implied ratification

When there is an undisclosed principal, the agent is: a. liable to the third party for the principal's nonperformance of the contract b. not liable to the third party for the principal's nonperformance of the contract c. liable to the undisclosed principal for the third party's nonperformance of the contract d. liable for only half of the damages incurred by the principal's nonperformance of the contract e. none of the other choices are correct

a. liable to the third party for the principal's nonperformance of the contract

Which of the following is a common problem with employee handbooks: a. making promises about discipline procedures that are not followed consistently b. putting a bold disclaimer at the front of the handbook that says it is not a contract c. requiring employees to sign a statement indicating that they have read the disclaimer that says the handbook is not a contract d. all of the other specific choices are correct e. none of the other specific choices are correct

a. making promises about discipline procedures that are not followed consistently

An agent must be able to show where money or property comes from and goes to because of his duty: a. to account b. to notify c. of loyalty d. of responsibility e. to profit

a. to account

The duty of an agent not to mix personal funds with the funds of the principal is the duty: a. to account b. of loyalty c. to notify d. to perform e. none of the other choices, unless instructed not to do this

a. to account

If an agent claims to have authority but in fact has none, the principal is: a. not responsible for the agent's dealings with third parties who have no reason to think the agent has authority b. responsible for the agent's dealings with third parties who have no reason to think the agent has authority c. responsible for up to 50% of the monetary value of any contracts entered into by third parties and the agent d. responsible for up to 25% of the monetary value of any contracts entered into by third parties and the agent e. none of the other choices are correct

a. not responsible for the agent's dealings with third parties who have no reason to think the agent has authority

A(n) ____ relationship is one in which an agent acts on behalf of or for the principal, with a degree of personal discretion. a. principal-agent b. master-servant c. employer-employee d. employer-independent contractor e. none of the other choices are correct

a. principal-agent

Putting a bold disclaimer at the front of the handbook that says it is not a contract and requiring employees to sign the disclaimer is an attempt by businesses to: a. protect themselves from being found to create an implied contract b. protect employees from implied contracts c. protect employees from express contracts d. protect themselves from suits regarding express contracts e. none of the other choices are correct

a. protect themselves from being found to create an implied contract

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

a. ratified Clark's actions and so became liable for his actions

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

a. ratifies the agency

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

a. ratifying the agreement

Traditionally, the chief difference between an agent and a servant (employee) was that the: a. servant was generally not employed to represent a principal in business dealings b. servant was usually allowed more personal discretion in deciding how to accomplish a certain objective c. agent was not controlled by the principal d. servant acted on behalf of the master in contractual matters involving third parties e. none of the other choices

a. servant was generally not employed to represent a principal in business dealings

The authority given by the principal to an agent, conferring on the agent the power and right to change the principal's legal status is referred to as: a. special authority b. authority in rem c. authority at law d. general authority e. none of the other choices

a. special authority

Adam enters into an oral agreement with Tushar that Tushar will sell Adam's house for him. A week later, the house burns down. Adam and Tushar's agency is now: a. terminated by operation of law b. still in place c. illegal in some states d. fraudulent in all states e. temporarily suspended

a. terminated by operation of law

If an agent or employee commits an unauthorized tort outside the scope of employment: a. the agent or employee is liable to the third party for damages incurred and the principal or employer is not b. both the agent or employee and the principal or employer are liable to the third party for damages incurred c. the principal or employer is liable to the third party for damages incurred and the agent or employee is not d. no one is liable to the third party e. none of the other choices are correct

a. the agent or employee is liable to the third party for damages incurred and the principal or employer is not

An express contract in employment exists when: a. the employer and employee agree on employment for a certain time b. job security is not provided c. the employer and employee agree on a certain rate of compensation d. the employer agrees not to fire the employee without 2 weeks notice e. none of the other choices are correct

a. the employer and employee agree on employment for a certain time

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

a. the important facts of the agreement

Implied authority consists of: a. the power to do whatever is reasonable and customary to carry out the agency purpose b. the power to mingle the funds of the agent and principal c. limits on an agent's actions, so that the agent may only do what the principal orders, in writing or orally d. the power of the agent to withhold services if the principal fails to pay her e. the power of an agent to do whatever is authorized by the Uniform Agency Act

a. the power to do whatever is reasonable and customary to carry out the agency purpose

Apparent authority arises when: a. the principal creates an appearance of authority in an agent that leads a third party to conclude reasonably that the agent has authority to act for the principal b. the agent creates an appearance of authority in a principal that leads a third party to conclude reasonably that the agent has authority to act for the principal c. the agent forges documents conferring authority on himself d. the principal gives the agent implied authority e. none of the other choices are correct

a. the principal creates an appearance of authority in an agent that leads a third party to conclude reasonably that the agent has authority to act for the principal

An employer could be held liable for negligence in hiring if: a. they hire a person who could be expected to possibly cause problems b. they hire a person who has no criminal record c. they hire a person who owns property with liens on it d. they hire a person who has never had a job before e. they hire a person without a college degree

a. they hire a person who could be expected to possibly cause problems

Carter, who had been convicted of violent crimes, was hired as an independent contractor to sell vacuum cleaners door-to-door. He assaulted a customer in her home who sued the vacuum cleaner company. You would expect the Texas high court to hold that company: a. was liable for negligence in hiring b. was not liable because employers are not liable for acts of independent contractors c. was not liable because Carter's actions were in violation of his instructions d. was not liable because it had no control over Carter's actions when he was selling e. none of the other choices

a. was liable for negligence in hiring

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

a. ways that an agency may be established

Under the common law doctrine of ____, employers are free to discharge employees for any reason at any time, and employees are free to quit their jobs for any reason at any time. a. work at will b. work at reasonable compensation c. worker rights d. fair work e. freedom of employment

a. work at will

Cook instructs Chan, her agent, to buy a van for her business. Chan contracts for a van with a third party, who knows that Chan is an agent. If Cook does not like the van and refuses to pay for it, the seller may sue: a. Chan because she did not have authority to enter into a final contract without permission b. Cook because Chan has actual authority to make a contract on behalf of her principal c. Cook if Chan signed the contract expressly on behalf of Cook; that is, the principal was revealed before the contract was made d. Cook but only if Chan has apparent authority to enter into the contract e. no one; there was no valid contract

b. Cook because Chan has actual authority to make a contract on behalf of her principal

Juan and Marie enter into an oral agreement that Marie will sell Juan's crusty herb garlic bread to gourmet food stores in the area. This works until Juan gets sick and no longer makes his bread. Marie is furious that Juan is unable to supply her with the popular bread and sues him for lost profits. A court is likely to rule: a. Juan cannot abandon the agency relationship he established with Marie b. Marie's authority to act as agent for Juan lapsed and the agency relationship is terminated c. Juan should pay Marie damages for reducing her income d. Marie may not be fired because she and Juan had a contract of employment e. Juan cannot abandon the agency relationship he established with Marie and Juan should pay Marie damages for reducing her income

b. Marie's authority to act as agent for Juan lapsed and the agency relationship is terminated

Jimmy must be at work no later than 7 AM on the days he works. Because he must hurry to get to work, he runs over a lady going across the street. She sues Jimmy and his employer for her injuries. She has: a. no case unless she was in a crosswalk going with the light b. a case against Jimmy, but no case against his employer c. a case against Jimmy and against his employer under vicarious liability d. a case against Jimmy's employer if Jimmy is found to be negligent, such liability means that Jimmy would not be personally liable e. a right to seek worker's compensation if she was walking to work

b. a case against Jimmy, but no case against his employer

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

b. a general power of attorney

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

b. a gratuitous agent

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

b. actions by the principal lead a person to believe that the presumed agent has authority to act on the principal's behalf

____ is the authority given by the principal to the agent. a. artificial authority b. actual authority c. legitimate authority d. general authority e. total authority

b. actual authority

The duties of a principal to an agent do not include: a. cooperating with the agent b. allowing the agent "significant discretion" c. reimbursing the agent for any reasonable expense d. indemnifying the agent for legal liability incurred in completing the purpose of the agency e. all of the other choices are required

b. allowing the agent "significant discretion"

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

b. by action shows a clear intent to be bound by unauthorized acts of the agent

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

b. by an agent who has paid for the right to exercise authority with regard to a business

Many companies give employees handbooks that discuss company policy and procedures. Legally, handbooks: a. have no legal status; they are merely advisory b. can create binding contractual employment obligations c. are legal documents that, under the NLRA, are a part of the employment contract d. are documents that, at common law, have always been a part of the employment contract e. none of the other choices

b. can create binding contractual employment obligations

A(n) ____ is one whose identity is known by the third party at the time a contract is entered into with an agent. a. undisclosed principal b. disclosed principal c. specific principal d. legitimate principal e. clear principal

b. disclosed principal

A(n) ____is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the principal. a. undisclosed principal b. disclosed principal c. specific principal d. legitimate principal e. clear principal

b. disclosed principal

Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses his flight to Chicago so he has to buy a second plane ticket. As principal, Lee: a. has a duty to reimburse Scott for the second plane ticket b. does not have a duty to reimburse Scott for the second plane ticket because it was Scott's fault he had to buy it c. has a duty to reimburse Scott for half the plane ticket d. has a duty to reimburse Scott for 1/3 of the plane ticket e. does not have a duty to reimburse Scott for the ticket because he had no duty to reimburse Scott for a plane ticket to Chicago anyway

b. does not have a duty to reimburse Scott for the second plane ticket because it was Scott's fault he had to buy it

If an agency agreement did not specify how much an agent would be paid for his work, the principal has a ____ the "customary" amount. a. duty to cooperate b. duty to compensate c. duty of obedience to d. duty to indemnify e. none of the other choices would apply

b. duty to compensate

The principal has a ____ with her agent by performing responsibilities defined in the agreement forming the agency. a. duty to inform b. duty to cooperate c. duty to compensate d. duty to reimburse e. duty to indemnify

b. duty to cooperate

A UPS package sorter is an example of a(n): a. agent b. employee c. employee with agency powers d. independent contractor e. agent and independent contractor

b. employee

____ consists of oral or written instructions given by the principal to an agent. a. substitute authority b. express authority c. implied authority d. quasi authority e. legal authority

b. express authority

An agent is a(n) ____ of the principal, which means that the agent occupies a position of trust, honesty, and confidence for the principal. a. employee b. fiduciary c. legal aid d. friend e. business partner

b. fiduciary

A person who volunteers with no expectation of being paid for her services is a(n): a. exceptional agent b. gratuitous agent c. agent who has an agency coupled with an interest d. one-time agent e. none of the other choices

b. gratuitous agent

Bill is an attorney in Ohio. Marla hires Bill to create a trust for her children. Bill has not been keeping up with developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much more beneficial trust. In this case, Bill: a. has violated a duty of loyalty b. has violated a duty of reasonable care c. has violated a duty of obedience d. has violated a duty to account e. may be out-of-date but has violated no duties

b. has violated a duty of reasonable care

Karen has a history of drunk driving and has been convicted several times. The Pizza Parlor hires her as a delivery person, despite knowing her history. If Karen causes an accident while on the job because she has been drinking you would expect the courts to: a. hold Karen liable, but not The Pizza Parlor since it was Karen's decision to drink and drive b. hold The Pizza Parlor liable for negligence in hiring c. hold neither Karen nor The Pizza Parlor liable d. hold The Pizza Parlor liable for negligence in hiring or not, depending on the state e. none of the other choices are correct

b. hold The Pizza Parlor liable for negligence in hiring

The power of an agent to do whatever is reasonable and customary to carry out the agency purpose is given by: a. express authority b. implied authority c. quasi authority d. false authority e. verbal authority

b. implied authority

The principal's duty to reimburse dose not cover expenses: a. incurred during business hours b. incurred due to the agent's misconduct or negligence c. incurred by the agent while conducting business for the principal d. incurred while traveling to do business for the principal e. none of the other choices are correct

b. incurred due to the agent's misconduct or negligence

Attorneys, auctioneers, and other such persons who conduct business on behalf of the principal are examples of: a. agents who are also employees b. independent contractors who are also agents c. independent contractors who are also employers d. agents who are also employers e. none of the other choices are correct

b. independent contractors who are also agents

The principal's duty to indemnify the agent means the principal must: a. pay reasonable wages to the agent b. insure the agent against losses suffered during the course of authorized transactions c. pay for expenses incurred by agent that result from negligent behavior d. refrain from providing the agent with inferior goods e. pay reasonable wages to the agent and refrain from providing the agent with inferior goods

b. insure the agent against losses suffered during the course of authorized transactions

Because of the duty to inform, an agent must: a. be able to show where money or property comes from and goes to b. keep her principal informed of all facts relevant to the agency c. engage in acts that could lead to personal liability d. perform responsibilities with the degree of care that a reasonable person would exercise under the circumstances e. record all transactions related to the agency

b. keep her principal informed of all facts relevant to the agency

The duty of ____ requires an agent to place the principal's interests before the agent's personal interests or those of any third party: a. accounting b. loyalty c. performance d. reasonable care e. none of the other choices; there is no such duty

b. loyalty

According to the California supreme court in Foley v. Interactive Data, employer handbooks: a. never create contractual limits to employment-at-will b. may provide grounds for a breach of employment contract c. are valid only if negotiated before hand with employees d. are invalid due to the management power to write them e. none of the other choices

b. may provide grounds for a breach of employment contract

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

b. must be in writing

In Guz v. Bechtel National the supreme court of California held that Guz, an employee who had been fired and sued for wrongful dismissal had: a. no cause of action because his performance had been poor b. no cause of action for breach of implied contract; his best hope was a violation of personnel policies that constituted a contract c. no cause of action for violation of personnel policies, because the company followed proper procedure, but may have a cause of action for breach of implied contract d. a cause of action for breach of an implied covenant of fair dealing e. a cause of action for breach of California's employment code

b. no cause of action for breach of implied contract; his best hope was a violation of personnel policies that constituted a contract

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

b. power of attorney

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

b. principal

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

b. principal

The duty of loyalty: a. requires a principal to place the agent's interests before the principal's personal interests or those of any third party b. requires an agent to place the principal's interests before the agent's personal interests or those of any third party c. requires the agent to work for only one principal at a time d. requires the agent to work without compensation if necessary e. refers to the medieval roots of agency law

b. requires an agent to place the principal's interests before the agent's personal interests or those of any third party

The law of agency places its primary emphasis on the duties: a. the principal owes to the agent b. the agent owes to the principal c. the agent owes to the subagent d. the universal agent owes to the general agent e. all of the other choices have equal standing

b. the agent owes to the principal

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that: a. the district court was correct in its ruling that AFLAC was not bound by the contract because Galgano did not have apparent authority b. the district court was correct in its ruling that AFLAC was bound by the contract because Galgano had apparent authority c. the district court was incorrect in its ruling that AFLAC was bound by the contract because Galgano did not, in fact, have apparent authority d. the district court was incorrect in its ruling that AFLAC was not bound by the contract because Galgano had express authority e. none of the other choices are correct

b. the district court was correct in its ruling that AFLAC was bound by the contract because Galgano had apparent authority

An agent must perform instructions provided by the principal. If the agent fails to do so, he violates: a. the duty of cooperation b. the duty of obedience and performance c. the duty to reimburse d. the duty of loyalty e. the duty of accounting

b. the duty of obedience and performance

The duty of an agent to perform responsibilities with the degree of care that a reasonable person would exercise under the circumstances is: a. the duty to cooperate b. the duty of reasonable care c. the duty of realistic care d. the duty of obedience e. the duty of reasonable obligation

b. the duty of reasonable care

Andrea has been working very hard for her employer, Bill. Two weeks before Andrea is due for a bonus payment, Bill fires her for no reason. Andrea could make a case that: a. her at-will employment rights have been violated b. the implied covenant of good faith and fair dealing has been violated c. the express covenant of good faith and fair dealing has been violated d. Andrea cannot make any kind of case against Bill e. none of the other choices are correct

b. the implied covenant of good faith and fair dealing has been violated

Actual authority give the agent: a. no real authority b. the power and right to change the principal's legal status c. the power and right to make all decisions for the principal, even on matters where the agent does not have authority d. a 50% ownership share in all the principal's assets e. none of the other choices are correct

b. the power and right to change the principal's legal status

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

b. the principal's acceptance of responsibility for an agent's activities

In Coelho v. Posi-Seal International, were an employee was fired without good cause despite explicit statements by the company president that the employee had job security, the supreme court of Connecticut held: a. there to be an express contract that was breached by the employer b. there to be an implied contract that was breached by the employer c. the employer violated an implied covenant of good faith d. that the employer violated public policy e. that the employee was at-will, so had no case

b. there to be an implied contract that was breached by the employer

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

b. universal agent

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC: a. was not obligated to the lease because real estate deals must be in writing with the principal of the company agreeing to the lease b. was not obligated to the lease because Galgano did not have apparent authority to sign a lease that would bind AFLAC c. was obligated on the lease as its employee had apparent authority d. was not obligated on the lease, but its employee who told Galgano it was ok to enter into such a lease was obligated e. all of the other choices are correct

b. was not obligated to the lease because Galgano did not have apparent authority to sign a lease that would bind AFLAC

Under American common law, employees are presumed to: a. work at a certain rate b. work at will c. work for compensation d. work for nothing e. work for agencies

b. work at will

. In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house from her and then cheated her on the transaction, the court held that: a. Gritton was liable for breaching his duty to Bearden, but Wardley had no knowledge of Gritton's actions so was not liable b. Gritton was liable for theft, but not for breach of his duty as an agent to Bearden, since that relationship expired before Gritton cheated Bearden c. Gritton and Wardley violated their fiduciary obligations to Bearden, so both are liable d. neither party was liable to Bearden because the contract was legitimate and her claim that she had been cheated by her agent, Gritton, was unfounded e. none of the other choices

c. Gritton and Wardley violated their fiduciary obligations to Bearden, so both are liable

In Yim v. J's Fashion Accessories, Inc., where J's Fashion sued Yim for failing to pay for goods he bought under the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung Enterprise, Inc which also did business under the name Ho Tae, the courts held that: a. Yim was not liable because he was an agent of Hosung Enterprise, Inc. b. Yim was not liable, even though he was an agent of Hosung Enterprise, Inc. c. Yim was liable because he never disclosed Hosung Enterprise, Inc. as the principal d. Yim was not liable because he had apparent authority e. Yim was liable because he disclosed Hosung Enterprise, Inc. as the principal

c. Yim was liable because he never disclosed Hosung Enterprise, Inc. as the principal

An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as $80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are: a. a legitimate effort to get the deal done that will benefit everyone involved b. a violation of the duty of accounting c. a violation of the duty of loyalty d. a violation of the duty of notification to let the principal know he can counter-offer at a higher price e. unethical, but it does not violate legal duties

c. a violation of the duty of loyalty

Barbara, a purchasing agent for UTA, was fired for good reason. Being angry about her dismissal, she calls one of UTA's suppliers and orders 1,000 purple widgets UTA does not need. If UTA, the principal, is held liable for this transaction, it is because Barbara had: a. express authority b. implied authority c. apparent authority d. actual authority e. none of the other choices apply

c. apparent authority

Anderson was in Las Vegas for an industry trade show. One night, after having a lot to drink, she went to her room at 2 a.m. A hotel employee, who had a passkey, entered her room and raped her. He was apprehended and convicted. Anderson sued the hotel for negligently hiring as the employee had threatened a supervisor and there had been other instances of sexual assaults by hotel employees. The trial court held that the hotel was not liable because this assault was not foreseeable. The Nevada high court: a. agreed because the employee who committed the assault had no record of prior assaults. b. agreed because Anderson failed to lock her door so a passkey could not work. c. disagreed because the hotel knew that the employee had threatened a supervisor and he was not supervised when he carried a passkey. d. disagreed because under state law hotels are held strictly liable for assaults on guests by hotel employees. e. none of the other choices are correct.

c. disagreed because the hotel knew that the employee had threatened a supervisor and he was not supervised when he carried a passkey.

Because of the ____ an agent may not represent another party whose interests are in conflict with those of the principal. a. duty of non-competition b. duty of cooperation c. duty of loyalty d. duty to reimburse e. duty of obedience and performance

c. duty of loyalty

An agent has a ____ the funds and property of his principal that have been entrusted to him or have come into his possession. a. duty to compensate for b. duty to reimburse c. duty to account for d. duty to document e. duty to increase

c. duty to account for

Insuring an agent against losses suffered during the course of authorized transactions is part of the principal's: a. duty of cooperation b. duty of facilitation c. duty to indemnify d. duty to protect e. duty to reimburse

c. duty to indemnify

A principal has a ____ the agent for reasonable expenses incurred in carrying out the duties of the agency. a. duty to cooperate with b. duty of loyalty to c. duty to reimburse d. duty of obedience to e. none of the other choices would apply

c. duty to reimburse

A senior manager at Don Reid Ford is an example of a(n): a. agent b. employee c. employee with agency powers d. independent contractor e. agent and independent contractor

c. employee with agency powers

A(n) ____ relationship is one in which one person is an employee whose conduct is controlled by the employer. a. principal-agent b. agent-principal c. employer-employee d. employer-independent contractor e. none of the other choices are correct

c. employer-employee

In Guz v. Bechtel National, where Guz sued for breach of an implied contract to be terminated only for good cause and for breach of the implied covenant of good faith and fair dealing after he was fired by Bechtel National during a time of high profits, the supreme court held that Bechtel could: a. fire Guz without reason because he had not worked for Bechtel for more than 25 years b. not fire Guz without reason because he had worked for them for over 20 years c. fire Guz without cause because there was insufficient evidence of an implied contract of continued employment d. not fire Guz without cause because there was clear evidence of an implied contract of continued employment e. none of the other choices are correct

c. fire Guz without cause because there was insufficient evidence of an implied contract of continued employment

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

c. foreign agent

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

c. is a document that creates an agency

The buyer for an electronics store is bribed by a supplier to order more of the brand sold by the supplier. This action violates which of the agent's duties? a. notify b. account c. loyalty d. indemnity e. all of the other choices

c. loyalty

Kurt works for Jeris. One evening Kurt decides to use the company truck to pick up his date. On his way home from the movies, after dropping his date off, Kurt runs a red light and smashes into Bob. Is Jeris liable to Bob? a. yes, because Kurt was her agent b. yes, because Kurt was driving her truck c. no, because Kurt was acting outside the scope of his employment d. no, because Kurt was an independent contractor when not on the job e. no, because Kurt's actions negligent, not intentional

c. no, because Kurt was acting outside the scope of his employment

For an agent to be a fiduciary means to: a. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees b. have the right and obligation to sell goods belonging to a principal c. occupy a position of trust, honesty, and confidence with respect to the principal d. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees and have the right and obligation to sell goods belonging to a principal e. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees and have the right and obligation to sell goods belonging to a principal and occupy a position of trust, honesty, and confidence with respect to the principal

c. occupy a position of trust, honesty, and confidence with respect to the principal

A company that buys patents for the purpose of threatening others with lawsuits for patent infringement is known as a: a. patent thief b. patent controller c. patent troll d. patent dragon e. patent hoarder

c. patent troll

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

c. power of attorney

Employers may be liable for torts of employees that can be attributed to negligent hiring or supervision under the rule of law known as: a. contractor liability b. tortious liabilitius c. respondeat superior d. principal duty e. there is no such rule as the employee only is responsible

c. respondeat superior

The rule of law imposing vicarious liability upon an innocent principal is known as: a. contractor liability b. tortious liabilitius c. respondeat superior d. principal duty e. there is no such rule as the employee only is responsible

c. respondeat superior

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

c. the third party wishes for the principal to be a party to a contract

Which of the following can determine the scope of authority given to an agent: a. statements of the agent b. the principal's personal relationship with the agent c. the trade customs in business d. all of the other specific choices are correct e. none of the other specific choices are correct

c. the trade customs in business

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

c. those that are for the sale of land

An undisclosed principal is: a. known to the agent b. unknown to the agent c. unknown to third parties to contracts entered into with the agent d. known to partners e. known to third parties to contracts entered into with the agent

c. unknown to third parties to contracts entered into with the agent

Express authority consists of the agent's: a. inability to conduct business for the principal b. ability to mingle his funds with those of the principal c. written or oral instructions from principal to agent d. ability to hold power of attorney for the principal e. ability to withhold services in the event of nonpayment by the principal

c. written or oral instructions from principal to agent

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

c. you can accept the deal by express or implied ratification

The ____ provides some immunity for a company against content posted or submitted online by third parties, if a company is merely acting as a publisher. a. Communications Privacy Act b. Communications Legitimacy Act c. Communications Reality Act d. Communications Decency Act e. Communications Honesty Act

d. Communications Decency Act

In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who had employed Quality Metal Roof, a company that contracted with France's employer, Royalty Builders, to build them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that: a. Southern Equipment was liable because they engaged Royalty Builders to do the work b. Southern Equipment was not liable because they engaged Royalty Builders to do the work and in doing so passed the liability to Royalty Builders c. Southern Equipment was liable even though they did not engage Royalty Builders to do the work d. Southern Equipment was not liable because they did not engage Royalty Builders to do the work and they had no control over Royalty Builders e. Southern Equipment was not liable because France was a minor and should not have been working in construction

d. Southern Equipment was not liable because they did not engage Royalty Builders to do the work and they had no control over Royalty Builders

Lisa works for Sally. Lisa's jobs include selling the folk-art Santa Claus statutes that Sally hand-makes, as well as purchasing the wood for the statutes. In this case Lisa is: a. a servant only b. an agent only c. an independent operator d. a servant and an agent e. a master

d. a servant and an agent

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

d. a special agent

Fiduciary duties include: a. accounting, notification, and performance b. loyalty and reasonable care c. ratification and indemnification d. accounting, notification, performance, loyalty and reasonable care e. accounting, notification, performance, loyalty, reasonable care, ratification and indemnification

d. accounting, notification, performance, loyalty and reasonable care

The agent's ability to transact business on behalf of and for the principal depends on whether the agent possesses: a. actual authority b. apparent authority c. quasi-authority d. actual or apparent authority e. actual or apparent authority or quasi-authority

d. actual or apparent authority

When you go on vacation you give your neighbor authority to pick up your mail and watch for burglars for you. You tell the neighbor not to go into the house or let anyone else in. A fire on the hills threatens your house. The neighbor goes in to carry out valuables before the house burns. This action is: a. a trespass, which is illegal b. breaking and entering, which is a crime c. an agency by estoppel d. an agency through operation of law e. an agency by implied ratification

d. an agency through operation of law

Operation of law provides agents with the authority to act beyond the authority granted by the principal when: a. an agent has a good idea b. an agent has an opportunity to make a profit for the principal through his actions c. an agent understands all the risks d. an emergency exists e. the principal fails to make the right decision

d. an emergency exists

When a principal creates an impression of authority in an agent that leads a third party to conclude that the agent has authority to act for the principal, the agent is said to have: a. implied authority b. express authority c. actual authority d. apparent authority e. none of the other choices

d. apparent authority

The principal is possibly liable for the torts of the agent if the agent's tort was: a. authorized by the principal b. an unauthorized intentional tort outside the scope of the agent's employment c. an unauthorized intentional tort within the scope of the agent's employment d. authorized by the principal or an unauthorized intentional tort within the scope of the agent's employment e. authorized by the principal or an unauthorized intentional tort within the scope of the agent's employment or an unauthorized intentional tort outside the scope of the agent's employment

d. authorized by the principal or an unauthorized intentional tort within the scope of the agent's employment

Under which of the following conditions would a principal or employer be liable for the tort of an agent or employee: a. the tort was authorized by the principal b. the tort occurred within the scope of employment c. the tort was not authorized by the principal d. both a and b are correct e. none of the other choices are correct

d. both a and b are correct

Employee handbooks usually do which of the following? a. discuss grounds for discipline and dismissal b. communicate company policies and procedures c. eliminate liability for employers for any on-the-job injuries d. discuss grounds for discipline and dismissal and communicate company policies and procedures e. discuss grounds for discipline and dismissal and communicate company policies and procedures and eliminate liability for employers for any on-the-job injuries

d. discuss grounds for discipline and dismissal and communicate company policies and procedures

In Bearden v. Wardley Corp., where Gritton's real estate agent cheated her in a deal, the court held that Wardley, Gritton's employer, violated its ____ to Bearden: a. duty to inform b. duty of performance c. duty to account d. duty of care e. none of the other choices; Wardley was not responsible

d. duty of care

The principal is under a ____ for damages to cover the agent's losses (such as from litigation) suffered while undertaking authorized transactions for the principal. a. duty to cooperate b. duty of loyalty c. duty of obedience d. duty to indemnify e. none of the other choices would apply in such case

d. duty to indemnify

An agency can be ended upon reasonable notice by: a. only the agent b. only the principal c. only the party that initiated the agency d. either the agent or the principal e. none of the other choices are correct

d. either the agent or the principal

Suppose a car dealership hires people to sell cars to customers at the dealership. The people who are hired are most likely to be: a. employees only. b. agents only. c. independent contractors only. d. employees and agents. e. employees and independent contractors.

d. employees and agents.

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

d. express ratification

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

d. fails to object to the unauthorized activities of an agent and accepts the benefits of an unauthorized agreement with a third party

Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be? a. Lyle must pay Tom out of his own pocket b. Tom may sue Lyle but not Thelma to enforce the contract c. Tom can be justified in presuming Lyle had authority to sign the contract only if Tom asked Thelma d. if Tom was justified in presuming Lyle had authority to sign the contract, Thelma will be responsible e. neither Lyle nor Thelma will be responsible for paying because Lyle exceeded his duty of accounting to Thelma

d. if Tom was justified in presuming Lyle had authority to sign the contract, Thelma will be responsible

An independent contractor is an example of a(n): a. agent b. employee c. employee with agency powers d. independent contractor e. agent and independent contractor

d. independent contractor

Suppose a hurricane is going to hit South Florida; there are two days to prepare for it and the owner of a house is on a raft trip in Brazil and cannot be reached. The next door neighbors spend $800 on plywood and other materials to protect the house from the hurricane. Legally, this expenditure is likely to be: a. is a gift from the neighbors, nothing more b. is the responsibility of the homeowner; there is an agency by estoppel c. is the responsibility of the homeowner; there is implied ratification of the agency d. is the responsibility of the homeowner; there is agency by operation of law e. none of the other choices

d. is the responsibility of the homeowner; there is agency by operation of law

Geary was an employee of U.S. Steel. His concerns about the safety of a new product were ignored by his superior. He went to higher management to let them know of the problem. The product was withdrawn from the market, but Geary was fired by his superior. Geary sued the company for wrongful dismissal. The Pennsylvania court held that Geary: a. wins because he was protecting the public against harm, which outweighs the private interest here b. wins because his employment rights can be lost only after due process c. wins because management agreed with Geary's assessment of the product; the supervisor was wrong d. loses because of the employment-at-will doctrine e. none of the other choices

d. loses because of the employment-at-will doctrine

An at-will employee: a. may not be dismissed for any reason b. may only be dismissed for committing a major crime c. may only be dismissed for certain reasons specified in the employment contract d. may be dismissed at any time without reason or cause e. none of the other choices are correct

d. may be dismissed at any time without reason or cause

In Guz v. Bechtel National, Guz was fired by Bechtel after 22 years of service. The company eliminated his position despite his good performance and no financial problems in the company. The California high court held that Guz could: a. sue on the basis of breach of an implied contract to be terminated only for good cause b. sue for breach of the implied covenant of good faith and fair dealing c. sue for managerial negligence d. not sue due to employment at will e. none of the other choices

d. not sue due to employment at will

The scope of an agent's authority is determined from the: a. oral or written expressions of the principal b. principal's conduct c. standards of the Uniform Agency Act d. oral or written expressions of the principal or the principal's conduct e. oral or written expressions of the principal or the principal's conduct or the standards of the Uniform Agency Act

d. oral or written expressions of the principal or the principal's conduct

Which of the four general factors which bear upon whether a master-servant relationship exists is determinative: a. selection and engagement of the servant b. payment of compensation c. power of dismissal d. power of control e. all of the other specific choices are determinative

d. power of control

Which of the four general factors which bear upon whether a master-servant relationship exists is determinative: a. selection and engagement of the servant b. payment of compensation c. power of dismissal d. power of control e. none of the factors listed are determinative

d. power of control

An agent with authority to represent the principal only for a specific transaction, usually for a limited time is a(n): a. universal agent b. gratuitous agent c. agent who has an agency coupled with an interest d. special agent e. none of the other choices

d. special agent

The duty of an agent to keep his principal informed of all facts relevant to the agency purpose is called the duty: a. to account b. of performance c. of reasonable care d. to inform e. of loyalty

d. to inform

Under the rule of ____ a principal or employer can be liable for the authorized or unauthorized intentional or negligent torts of agents and employees who were acting within the scope of employment. a. fiduciary duty b. indemnification c. agent respondeat d. vicarious liability e. none of the other choices

d. vicarious liability

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

d. when an emergency exists and the "agent's" actions are in the public interest

____ is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. a. a special agent b. an apparent agent c. an employee d. an independent contractor e. a general agent

e. a general agent

Employment-at-will: a. allows employees to quit their jobs for any reason at any time b. allows employers to discharge employees for any reason at any time subject to contract obligations c. has been restricted by the courts or legislatures in some states that recognize some public policy limitations on the employer's right to fire an employee d. a and b e. a, b and c

e. a, b and c

Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted in: a. violation of her duty of loyalty b. violation of her duty of obedience c. violation of her duty of accounting d. accordance with her duty of accounting e. accordance with her duty of reasonable care

e. accordance with her duty of reasonable care

A factor courts may consider in determining whether an act was within the course and scope of employment under vicarious liability is, was the: a. act of the same general nature of those authorized by the principal b. agent authorized to be in the location at the time the act occurred c. agent serving or attempting to serve the principal's interests at the time of the tort d. act of the same general nature of those authorized by the principal and agent authorized to be in the location at the time the act occurred e. act of the same general nature of those authorized by the principal and agent authorized to be in the location at the time the act occurred and agent serving or attempting to serve the principal's interests at the time of the tort

e. act of the same general nature of those authorized by the principal and agent authorized to be in the location at the time the act occurred and agent serving or attempting to serve the principal's interests at the time of the tort

An auctioneer is an example of a(n): a. agent b. employee c. employee with agency powers d. independent contractor e. agent and independent contractor

e. agent and independent contractor

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC: a. was not obligated to the lease because real estate deals must be in writing with the principal of the company agreeing to the lease b. was not obligated to the lease because Galgano did not have universal agent authority to sign a lease to bind AFLAC c. was obligated on the lease as its employee had apparent authority d. was not obligated on the lease, but its employee who told Galgano it was ok to enter into such a lease was obligated e. all of the other choices are incorrect

e. all of the other choices are incorrect

The duties of a principal to an agent do not include: a. cooperating with the agent b. paying agent for services rendered c. reimbursing the agent for any reasonable expense d. indemnifying the agent for legal liability incurred in completing the purpose of the agency e. all of the other choices are required

e. all of the other choices are required

Which of the following is not a duty owed by the agent to the principal: a. loyalty b. reasonable care c. accounting d. notification e. all of the other choices are required

e. all of the other choices are required

In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who had employed Quality Metal Roof, a company that contracted with France's employer, Royalty Builders, to build them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that there are four general factors that bear upon whether a master-servant relationship exists. Which of the following is one of those factors: a. selection and engagement of the servant b. payment of compensation c. power of dismissal d. power of control e. all of the other specific choices are factors

e. all of the other specific choices are factors

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

e. any of the other choices

An agency may not be ended by: a. unilateral notice by the agent b. unilateral notice by the principal c. mutual consent by agent and principal d. lapse of agreed-upon time e. decision of a third party opposed to the agency

e. decision of a third party opposed to the agency

A disclosed principal is a principal whose identity is: a. known to the agent b. unknown to the agent c. unknown to third parties to contracts entered into with the agent d. known to partners e. known to third parties to contracts entered into with the agent

e. known to third parties to contracts entered into with the agent

Anna hires Jack to paint her house. He supplies his equipment and buys the paint for which he will be paid by Anna. One day while Jack is painting Anna invites Tom for lunch. As Tom is walking into the house Jack accidentally drops a can of paint on his head. With respect to agency law, is Anna liable for the harms Jack causes Tom? a. yes, because Jack is a servant b. yes, because Jack is a master c. yes, because Jack is an employee d. no, because respondeat superior applies e. no, because Jack is an independent contractor

e. no, because Jack is an independent contractor

. Implied authority consists of: a. the power of an agent to do whatever is authorized by the Uniform Agency Act b. the power to mingle the funds of the agent and principal c. limits on an agent's actions, so that the agent may only do what the principal orders, in writing or orally d. the power of the agent to withhold services if the principal fails to pay her e. none of the other choices

e. none of the other choices

A disclosed principal is a principal whose identity is: a. known to the agent b. unknown to the agent c. unknown to third parties to contracts entered into with the agent d. known to partners e. none of the other choices

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices

A person who volunteers with no expectation of being paid for her services is a(n): a. exceptional agent b. universal agent c. agent who has an agency coupled with an interest d. special agent e. none of the other choices

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices

An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as $80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are: a. a legitimate effort to get the deal done that will benefit everyone involved b. a violation of the duty of accounting c. a violation of the duty of notification d. unethical, but it does not violate legal duties e. none of the other choices

e. none of the other choices

An agent with authority to represent the principal only for a specific transaction, usually for a limited time is a(n): a. universal agent b. gratuitous agent c. agent who has an agency coupled with an interest d. one-time agent e. none of the other choices

e. none of the other choices

An employee (servant) who works for an employer (master): a. may not be an agent for the same employer as part of the relationship. b. may not be an independent contractor for the same employer as part of the relationship. c. may not be subject to control of details of work by the employer to retain employee status. d. may not be held responsible for any torts committed in the course of employment. e. none of the other choices

e. none of the other choices

An employee works for 20 years for a large company and has good job performance. When the company is reorganized, the employee is dismissed because he is "no longer needed." The employee probably has a good suit for: a. breach of implied covenant of good faith b. breach of express contract, since he worked for more than seven years c. tort of interference with contractual relations d. breach of an implied contract e. none of the other choices

e. none of the other choices

In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house from her and then cheated her on the transaction, the court held that: a. Gritton was liable for breaching his duty to Bearden, but Wardley had no knowledge of Gritton's actions so was not liable b. Gritton was liable for theft, but not for breach of his duty as an agent to Bearden, since that relationship expired before Gritton cheated Bearden c. Wardley was liable to Bearden because Gritton was its agent, but Gritton was not liable to Bearden because he had no legal obligation to her, only to Wardley d. neither party was liable to Bearden because the contract was legitimate and her claim that she had been cheated by her agent, Gritton, was unfounded e. none of the other choices

e. none of the other choices

In Guz v. Bechtel National, Guz was fired by Bechtel after 22 years of service. The company eliminated his position despite his good performance and no financial problems in the company. The California high court held that Guz could: a. sue on the basis of breach of an implied contract to be terminated only for good cause b. sue for breach of the implied covenant of good faith and fair dealing c. sue for managerial negligence d. sue for breach of his annual employment contract letter e. none of the other choices

e. none of the other choices

In Guz v. Bechtel National, where Guz was fired after 22 years good service in a personnel cutback and sued for improper dismissal, the California high court held that Guz: a. had a suit for breach of contract based on the employee handbook b. had a suit only for breach of implied contract to be terminated for good cause c. had a suit only for breach of implied covenant of fair dealing d. had a suit for both breach of implied contract and of implied covenant e. none of the other choices

e. none of the other choices

Juan and Marie enter into an oral agreement that Marie will sell Juan's crusty herb garlic bread to gourmet food stores in the area. This works until Juan gets sick and no longer makes his bread. Marie is furious that Juan is unable to supply her with the popular bread and sues him for lost profits. A court is likely to rule: a. Juan cannot abandon the agency relationship he established with Marie b. Marie may not be fired because she and Juan had a contract of employment c. Juan should pay Marie damages for reducing her income d. Juan cannot abandon the agency relationship he established with Marie and Juan should pay Marie damages for reducing her income e. none of the other choices

e. none of the other choices

Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted in: a. violation of her duty of loyalty b. violation of her duty of obedience c. violation of her duty of accounting d. accordance with her duty of accounting e. none of the other choices

e. none of the other choices

Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be? a. Lyle must pay Tom out of his own pocket b. Tom may sue Lyle but not Thelma to enforce the contract c. Tom can be justified in presuming Lyle had authority to sign the contract only if Tom asked Thelma d. neither Lyle nor Thelma will be responsible for paying because Lyle exceeded his duty of accounting to Thelma e. none of the other choices

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices

Suppose a hurricane is going to hit South Florida; there are two days to prepare for it and the owner of a house is on a raft trip in Brazil and cannot be reached. The next door neighbors spend $800 on plywood and other materials to protect the house from the hurricane. Legally, this expenditure: a. is a gift from the neighbors, nothing more b. is the responsibility of the homeowner; there is an agency by estoppel c. is the responsibility of the homeowner; there is implied ratification of the agency d. is the responsibility of the homeowner; there is express ratification of the agency e. none of the other choices

e. none of the other choices

The duty of ____ requires an agent to place the principal's interests before the agent's personal interests or those of any third party: a. accounting b. indemnity c. performance d. reasonable care e. none of the other choices

e. none of the other choices

The duty of an agent to keep his principal informed of all facts relevant to the agency purpose is called the duty: a. to account b. of obedience c. to indemnify d. of loyalty e. none of the other choices

e. none of the other choices

The law of agency places its primary emphasis on the duties: a. the principal owes to the agent b. the agent owes to the subagent c. the universal agent owes to the general agent d. all of the other specific choices have equal legal weights e. none of the other choices

e. none of the other choices

Under the rule of ____ a principal or employer can be liable for the authorized or unauthorized intentional or negligent torts of agents and employees who were acting within the scope of employment. a. fiduciary duty b. indemnification c. agent respondeat d. third-party rights, duties, and liabilities e. none of the other choices

e. none of the other choices

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

e. none of the other choices

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

e. none of the other choices

____ is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. a. a special agent b. an apparent agent c. an employee d. a general agent e. none of the other choices

e. none of the other choices

. If a person could be expected to possibly cause problems and an employer hires them anyway, the employer could be held liable for ____ if the employee commits a tort against a customer. a. lack of care in hiring b. irreverence in hiring c. irresponsibility in hiring d. lack of foresight in hiring e. none of the other choices are correct

e. none of the other choices are correct

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

e. none of the other choices are correct

A(n) ____ is one whose identity is known by the third party at the time a contract is entered into with an agent. a. undisclosed principal b. clear principal c. specific principal d. legitimate principal e. none of the other choices are correct

e. none of the other choices are correct

A(n) ____ is one whose identity is unknown by the third party at the time when a contract is entered into with an agent. a. clear principal b. disclosed principal c. specific principal d. legitimate principal e. none of the other choices are correct

e. none of the other choices are correct

A(n) ____is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the principal. a. undisclosed principal b. clear principal c. specific principal d. legitimate principal e. none of the other choices are correct

e. none of the other choices are correct

An agency ends without any action by the principal or the agent through: a. termination through action b. termination through inaction c. termination by redefinition d. termination by decision of law e. none of the other choices are correct

e. none of the other choices are correct

An agent has a ____ the funds and property of his principal that have been entrusted to him or have come into his possession. a. duty to compensate for b. duty to reimburse c. duty to increase d. duty to document e. none of the other choices are correct

e. none of the other choices are correct

An agent must be able to show where money or property comes from and goes to because of his duty: a. to profit b. to notify c. of loyalty d. of responsibility e. none of the other choices are correct

e. none of the other choices are correct

An agent must perform instructions provided by the principal. If the agent fails to do so, he violates: a. the duty of cooperation b. the duty of accounting c. the duty to reimburse d. the duty of loyalty e. none of the other choices are correct

e. none of the other choices are correct

Because of the ____ an agent may not represent another party whose interests are in conflict with those of the principal. a. duty of non-competition b. duty of cooperation c. duty of obedience and performance d. duty to reimburse e. none of the other choices are correct

e. none of the other choices are correct

Because of the duty to inform, an agent must: a. be able to show where money or property comes from and goes to b. record all transactions related to the agency c. engage in acts that could lead to personal liability d. perform responsibilities with the degree of care that a reasonable person would exercise under the circumstances e. none of the other choices are correct

e. none of the other choices are correct

Employers may be liable for torts of employees that can be attributed to negligent hiring or supervision under the rule of law known as: a. contractor liability b. tortious liabilitius c. there is no such rule as the employee only is responsible d. principal duty e. none of the other choices are correct

e. none of the other choices are correct

If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the principal must pay the agent: a. however much the agent's attorney demands b. at least half the customary rate c. for the rational value of the services provided d. however much the agent demands e. none of the other choices are correct

e. none of the other choices are correct

If an agent competes with his principal without the principal's consent: a. he is violating his duty of obedience and performance b. he is violating his duty of cooperation c. he is violating his duty to reimburse d. he is violating his duty to play fair e. none of the other choices are correct

e. none of the other choices are correct

In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who had employed Quality Metal Roof, a company that contracted with France's employer, Royalty Builders, to build them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that: a. Southern Equipment was liable because they engaged Royalty Builders to do the work b. Southern Equipment was not liable because they engaged Royalty Builders to do the work and in doing so passed the liability to Royalty Builders c. Southern Equipment was liable even though they did not engage Royalty Builders to do the work d. Southern Equipment was not liable because France was a minor and should not have been working in construction e. none of the other choices are correct

e. none of the other choices are correct

____ consists of oral or written instructions given by the principal to an agent. a. substitute authority b. legal authority c. implied authority d. quasi authority e. none of the other choices are correct

e. none of the other choices are correct

In Yim v. J's Fashion Accessories, Inc., where J's Fashion sued Yim for failing to pay for goods he bought under the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung Enterprise, Inc which also did business under the name Ho Tae, the courts held that: a. Yim was not liable because he was an agent of Hosung Enterprise, Inc. b. Yim was not liable, even though he was an agent of Hosung Enterprise, Inc. c. Yim was liable because he disclosed Hosung Enterprise, Inc. as the principal d. Yim was not liable because he had apparent authority e. none of the other choices are correct

e. none of the other choices are correct

Insuring an agent against losses suffered during the course of authorized transactions is part of the principal's: a. duty of cooperation b. duty of facilitation c. duty to reimburse d. duty to protect e. none of the other choices are correct

e. none of the other choices are correct

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

e. none of the other choices are correct

Operation of law provides agents with the authority to act beyond the authority granted by the principal when: a. an agent has a good idea b. an agent has an opportunity to make a profit for the principal through his actions c. an agent understands all the risks d. the principal fails to make the right decision e. none of the other choices are correct

e. none of the other choices are correct

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

e. none of the other choices are correct

Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses his flight to Chicago so he has to buy a second plane ticket. As principal, Lee: a. has a duty to reimburse Scott for the second plane ticket b. does not have a duty to reimburse Scott for the ticket because he had no duty to reimburse Scott for a plane ticket to Chicago anyway c. has a duty to reimburse Scott for half the plane ticket d. has a duty to reimburse Scott for 1/3 of the plane ticket e. none of the other choices are correct

e. none of the other choices are correct

The ____ provides some immunity for a company against content posted or submitted online by third parties, if a company is merely acting as a publisher. a. Communications Privacy Act b. Communications Legitimacy Act c. Communications Reality Act d. Communications Honesty Act e. none of the other choices are correct

e. none of the other choices are correct

The duty of an agent to perform responsibilities with the degree of care that a reasonable person would exercise under the circumstances is: a. the duty to cooperate b. the duty of reasonable obligation c. the duty of realistic care d. the duty of obedience e. none of the other choices are correct

e. none of the other choices are correct

The duty of loyalty: a. requires a principal to place the agent's interests before the principal's personal interests or those of any third party b. refers to the medieval roots of agency law c. requires the agent to work for only one principal at a time d. requires the agent to work without compensation if necessary e. none of the other choices are correct

e. none of the other choices are correct

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

e. none of the other choices are correct

The power of an agent to do whatever is reasonable and customary to carry out the agency purpose is given by: a. express authority b. verbal authority c. quasi authority d. false authority e. none of the other choices are correct

e. none of the other choices are correct

The principal has a ____ with her agent by performing responsibilities defined in the agreement forming the agency. a. duty to inform b. duty to indemnify c. duty to compensate d. duty to reimburse e. none of the other choices are correct

e. none of the other choices are correct

The principal's duty to indemnify the agent means the principal must: a. pay reasonable wages to the agent b. pay reasonable wages to the agent and refrain from providing the agent with inferior goods c. pay for expenses incurred by agent that result from negligent behavior d. refrain from providing the agent with inferior goods e. none of the other choices are correct

e. none of the other choices are correct

The rule of law imposing vicarious liability upon an innocent principal is known as: a. contractor liability b. tortious liabilitius c. there is no such rule as the employee only is responsible d. principal duty e. none of the other choices are correct

e. none of the other choices are correct

Under the common law doctrine of ____, employers are free to discharge employees for any reason at any time, and employees are free to quit their jobs for any reason at any time. a. freedom of employment b. work at reasonable compensation c. worker rights d. fair work e. none of the other choices are correct

e. none of the other choices are correct

When an agency is terminated: a. the agent's authority to act for the principal does not end b. the agent may not work for someone who is in competition with the principal c. the agent's authority to act for the principal is reduced to very limited conditions d. the agent may never work with the principal again e. none of the other choices are correct

e. none of the other choices are correct

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

e. none of the other choices are correct

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

e. none of the other choices are correct

Anderson was in Las Vegas for an industry trade show. One night, after having a lot to drink, she went to her room at 2 a.m. A hotel employee, who had a passkey, entered her room and raped her. He was apprehended and convicted. Anderson sued the hotel for negligently hiring as the employee had threatened a supervisor and there had been other instances of sexual assaults by hotel employees. The trial court held that the hotel was not liable because this assault was not foreseeable. The Nevada high court: a. agreed because the employee who committed the assault had no record of prior assaults. b. agreed because Anderson failed to lock her door so a passkey could not work. c. disagreed because hotel supervisors had seen the employee enter rooms improperly so was on notice that his actions were suspicious. d. disagreed because under state law hotels are held strictly liable for assaults on guests by hotel employees. e. none of the other choices are correct.

e. none of the other choices are correct.

The duty of an agent not to mix personal funds with the funds of the principal is the duty: a. of reasonable care b. of obedience c. to notify d. to perform e. none of the other choices, unless instructed not to do this

e. none of the other choices, unless instructed not to do this

In Bearden v. Wardley Corp., where Gritton's real estate agent cheated her in a deal, the court held that Wardley, Gritton's employer, violated its ____ to Bearden: a. duty to inform b. duty of performance c. duty to account d. duty of obedience e. none of the other choices; Wardley was not responsible

e. none of the other choices; Wardley was not responsible

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

e. operation of law or by oral agreement of the parties or by written agreement of the parties

The scope of an agent's authority is determined from the: a. oral or written expressions of the principal b. principal's conduct c. customs in the business for which the agent is employed d. oral or written expressions of the principal or the principal's conduct e. oral or written expressions of the principal or the principal's conduct or the customs in the business for which the agent is employed

e. oral or written expressions of the principal or the principal's conduct or the customs in the business for which the agent is employed

The principal may hold the third party to a contract, in an undisclosed principal situation, except when the: a. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party b. agent's performance is personal to the contract c. contract, when a negotiable instrument, does not include the identity of the principal or existence of the agency relationship d. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract e. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract or the undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract

e. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract or the undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or the agent's performance is personal to the contract