BUL 3310 Unit 7
Rhonda Realtor was hired to find Client an undeveloped lot that met the following requirements: the lot must be in the mountains, on a pristine lake, consist of at least 10 acres, and be available for no more than $500,000. Rhonda found a property that met all these requirements for only $425,000. Enchanted, she bought the property for herself. She did not tell Client about her find and is still diligently seeking another property that meets Client's needs. Which, if any, agency duties has Rhonda violated? Group of answer choices Duty of loyalty Duty to inform Duty to obey instructions All of the above
All of the above
Which of the following is not an element of ratification? Group of answer choices The principal was fully disclosed at the time the contract was formed. The principal is aware of all of the terms of the agreement The third party has not withdrawn from the contract All of the above are requirements for ratification
All of the above are requirements for ratification
Another term for ostensible authority is _______________authority. Group of answer choices Apparent Incidental Express Constructive
Apparent
An agent has a duty to obey the principal's instructions unless Group of answer choices The instructions require the agent to perform duties that are not in the agency agreement. The instructions are to perform an illegal act. The instructions are not in the principal's best interest. Both a and b
Both a and b
An agent's actual authority may be Group of answer choices Express Implied Ostensible Both a and b
Both a and b
Carla was the agent for Newco, a New York company that wanted to relocate its corporate offices to New Jersey. Carla was given the authority to purchase 600 acres of New Jersey farmland, but was not allowed to tell the sellers that she represented Newco. She was only allowed to say that she represented an out- of- state corporation. After the contracts were signed, Newco's board decided not to relocate and wants to rescind the contacts. Which of the following statements is true about the liability of the parties? Group of answer choices Carla has no personal liability on the contracts because she was acting within the scope of her authority. Carla is personally liable on the contracts, but Newco must indemnify her because she was acting within the scope of her authority. Newco is liable to the sellers on these contracts because Carla was acting within the scope of her employment. Both b and c are true.
Both b and c are true.
In determining the rights and duties of the parties to an agency relationship, the courts look to Group of answer choices Case law The Uniform Commercial Code The National Labor Relations Act Federal common law
Case Law
Which legal rule will not impose punitive damages on a master for the torts of his servants unless the master himself took some part in the wrongful action? Group of answer choices Vicarious liability rule Durham rule Complicity rule Transferred liability rule
Complicity rule
Jill hired Ace Paving Company to pave her driveway. Ace's driver, Tom, carelessly dropped a load of hot tar on the lawn and prized rose bushes of Jill's neighbor, Dan. From whom can Dan seek damages? Group of answer choices Dan can only sue Jill because she hired an independent contractor to carry out an unreasonably dangerous activity. Dan can only sue Ace because Tom was clearly acting within the scope of his employment. Dan can only sue Ace and Tom in joint and several liability. Dan can sue Jill and Ace and Tom in joint and several liability.
Dan can only sue Ace and Tom in joint and several liability.
A principal whose identity is known to a third party is an _____________principal. Group of answer choices Disclosed Undisclosed Partially disclosed Transparent
Disclosed
In order to ratify an agent's contract, the principal must have been __________at the time the contract was formed. Group of answer choices Disclosed Partially disclosed Either disclosed or partially disclosed Undisclosed
Disclosed
The only principal who can ratify a contract is an _____________ principal. Group of answer choices Disclosed Undisclosed Partially disclosed Both a and c can ratify a contract.
Disclosed
Whether or not a principal has, through his actions, ratified a contract is a question of _________to be decided by the _________. Group of answer choices Fact.judge Law.judge Fact.jury Law.jury
Fact.jury
Whether or not a servant was acting in the scope of his employment when he injured a third party is a question of __________ to be decided by the ______. Group of answer choices Fact.judge Law.judge Fact.jury Law.jury
Fact.jury
Mike is a sole proprietor who buys, sells and repairs kilns and other equipment used in pottery making. He has an arrangement with K&M, a large equipment maker, to sell K&M's kilns in both his own name and in K&M's name and to receive payments from customers. Mike's relationship with K&M is that of a ________________. Group of answer choices Independent contractor Special agent Broker Factor
Factor
A factor is an agent with the special limited authority of procuring a customer so that the principal can affect a sale or exchange of property. Group of answer choices True False
False
A multiple listing agreement lists real property with several brokers, but only the selling broker earns a commission on the sale. Group of answer choices True False
False
A principal always has the right to terminate an agency. Group of answer choices True False
False
A principal may terminate the agency of a disloyal agent only if the principal suffered a financial loss because of the agent's disloyalty. Group of answer choices True False
False
A store manager is an example of a special agent. Group of answer choices True False
False
Agency agreements must always be in writing. Group of answer choices True False
False
An agent operating under a written power of attorney is called an attorney-at-law. Group of answer choices True False
False
An employer cannot be held liable under respondeat superior for the negligence of a person who is working under the employer's control and direction, but who is not being paid. Group of answer choices True False
False
An employer may have liability for the negligent hiring of a servant, but not for the negligent hiring of an independent contractor. Group of answer choices True False
False
Assume that you hire an independent contractor to transport hazardous chemicals for your company. If he negligently causes damages to a third part while carrying out the job, you will not be liable because of his status as an independent contractor. Group of answer choices True False
False
Employers have greater liability for employee torts in states that have adopted the complicity rule than in those states that follow vicarious liability. Group of answer choices True False
False
Officers of corporations have unlimited actual authority to sell the real property and intangible assets of the corporation. Group of answer choices True False
False
The doctrine of respondeat superior does not apply when the employees are highly trained professionals, such as doctors and airline pilots. Group of answer choices True False
False
Undisclosed principals have no liability to third parties for contracts negotiated by their agents. Group of answer choices True False
False
When ratifying a contract, a principal may select which provisions of the contract to accept and which to reject. Group of answer choices True False
False
Whether or not a principal has ratified a contract is a question of law to be decided by the judge at trial. Group of answer choices True False
False
When a servant completely abandons the master's work to pursue his own interests, the servant is on a ___________. Group of answer choices Detour Outing Trespass Frolic
Frolic
Jim was called to active duty in the military. Knowing that he would be out of the country for a year or more, he gave his sister Peg authority to pay bills in his name, access his bank accounts, buy and sell stock in his brokerage accounts, and incur expenses to maintain his house and car and boat. Peg is Jim's______________. Group of answer choices Independent contractor Broker General agent Special agent
General agent
Ann Agent was hired by Buyer to locate a piece of property suitable for building an office complex. Ann and her cousin jointly owned a piece of property that suited Buyer's needs. Without telling Buyer of her ownership interest, Ann negotiated the purchase on Buyer's behalf. The price for the property was its fair market value. What options are available to Buyer when he learns that Ann was the seller? Group of answer choices He may rescind the contract because Ann violated her duty of loyalty. He must go through with the contract because the price was objectively fair. He must go through with the contract because her cousin's participation made this an arm's length deal. He must go through with the contract, but does not have to pay Ann her commission.
He may rescind the contract because Ann violated her duty of loyalty.
Implied authority is also known as ____________authority. Group of answer choices Apparent Ostensible Incidental Constructive
Incidental
A principal is obligated to pay any judgments against an agent who incurred liability to a third party while carrying out the principal's orders. This duty to hold the agent "harmless" is the duty to___________. Group of answer choices Reimburse Indemnify Compensate Account
Indemnify
The duty of the principal to hold an agent "harmless," and to pay any judgments for which the agent becomes liable while carrying out the principal's orders, is the duty to_______________. Group of answer choices Mitigate Indemnify Protect Reimburse
Indemnify
Bill hired Acme Paving to pave his driveway. Acme is Bill's __________________. Group of answer choices Broker Independent contractor Factor Special agent
Independent contractor
Tucker hired SoClean, a house washing service, to power wash his house and deck. SoClean's status of that of a (n) ________________________. Group of answer choices Factor Special agent Independent contractor Proprietor
Independent contractor
Neda, an attorney, has engaged in the following representations this past year. Which one is least likely to violate her duty of loyalty to her clients? Group of answer choices Neda represented both the buyer and the seller in the purchase of a business. Neda represented both spouses in their property settlement following the divorce. Neda represented a local restaurant, which she patronizes frequently, in an employment discrimination suit. Neda created a limited partnership with three limited partners; she was one of the limited partners.
Neda represented a local restaurant, which she patronizes frequently, in an employment discrimination suit.
In which of the following situations would an employee avoid liability for torts committed while carrying out his employment obligations? Group of answer choices A corporate officer acting on behalf of the corporation A servant following the instructions of his master An agent carrying out the orders of his principal None of the above: everyone has personal liability for the torts he commits.
None of the above: everyone has personal liability for the torts he commits.
Apparent authority is also known as _____________authority. Group of answer choices Ostensible Incidental Express Constructive
Ostensible
When a third party knows that an agent is acting on behalf of a principal, but does not know the identity of the principal, the principal is________________ Group of answer choices Disclosed Undisclosed Partially disclosed Transparent
Partially disclosed
Jim was called to active duty in the military. Knowing that he would be out of the country for a year or more, he gave his sister Peg authority to pay bills in his name, access his bank accounts, buy and sell stock in his brokerage accounts, and incur expenses to maintain his house and car and boat. Because Peg is not compensated for the activities she is performing on her brother's behalf, she owes him Group of answer choices Only the duty of loyalty. Only the duties of loyalty and information. Only the duties of loyalty, information and the duty to account Peg owes Jim all the duties of an agent to a principal.
Peg owes Jim all the duties of an agent to a principal.
In an agency relationship, the principal always has the ____________to end the relationship; and the agent always has the _________________to end the relationship. Group of answer choices Right-------------------Right Power-----------------Power Right-------------------Power Power-----------------Right
Power-----------------Power
When a principal decides to adopt and be bound on a contract that his agent did not have the authority to form, the principal _______________ the contract. Group of answer choices Indemnifies Reforms Ratifies Restores
Ratifies
The legal doctrine that holds the master liable for the torts committed by a servant while acting within the scope of this employment is Group of answer choices Quid pro quo Respondeat superior Caveat emptor Alter ego liability
Respondeat superior
The well-established legal principal that employers are liable for the torts committed by employees while acting within the scope of their employment is _____________________. Group of answer choices The rule of transferred intent The rule of ultra vires The rule of corporate complicity. Respondeat superior
Respondeat superior
Conan, an outstanding college pitcher, hired Masters to represent him in negotiations with a major league team. Masters may only negotiate a contract for Conan; he has no authority to make investments or purchase property on Conan's behalf. Masters would be classified as a (n) __________. Group of answer choices Factor Broker Special agent General agent
Special agent
Jim was called to active duty in the military. Knowing that he would be out of the country for a year or more, he gave his sister Peg authority to pay bills in his name, access his bank accounts, buy and sell stock in his brokerage accounts, and incur expenses to maintain his house and car and boat. Jim will be out of the country when a piece of land he sold goes to settlement. He wants to give Peg the authority to convey the deed and sign any necessary settlement papers in his name. To do this he should give Peg _______________. Group of answer choices Special power of attorney General power of attorney Factors letters of appointment Broker Authority
Special power of attorney
What is the status of an agency agreement when a principal files for Chapter 7 bankruptcy? Group of answer choices The agency terminates by operation of law when the court grants the order for relief. The agency terminates by operation of law 30 days after the trustee takes over the debtor's assets. The agency terminates by operation of law 60 days after the trustee takes over the debtor's assets. The agency terminates by operation of law 90 days after the trustee takes over the debtor's assets.
The agency terminates by operation of law when the court grants the order for relief.
Sue hired Harry to sell her prized racing filly, YouGoGirl. Harry's commission was to be 20% of the selling price. Before a buyer could be found, YouGoGirl died of an equine virus. What is the status of the agency agreement between Sue and Harry? Group of answer choices The agency terminates by operation of law. The agency continues unless the principal, Sue, takes a unilateral action to end it. The agency continues unless the agent, Harry, takes a unilateral action to end it. The agency continues unless is it terminated by the mutual agreement of Sue and Harry.
The agency terminates by operation of law.
Sam is retiring and selling his business to Ed, an employee. They want Larry Lawyer to draw up a sales contract that protects both Sam's interests as the seller and Ed's interests as the buyer. If Larry agrees to this dual agency, which agency duty would he most risk violating? Group of answer choices The duty of loyalty The duty not to be negligent The duty to account Dual agencies pose no particular problems in carrying out agency duties.
The duty of loyalty
A principal will not have a duty to reimburse an agent if Group of answer choices The principal is disclosed The principal is undisclosed The expenses were the result of the agent's negligence The expenses are for food or t ravel
The expenses were the result of the agent's negligence
Which of the following events would not terminate an agency by operation of law? Group of answer choices The principal breaches his or her duty to reimburse the agent. The agent dies. The principal dies. The purpose of the agency becomes illegal.
The principal breaches his or her duty to reimburse the agent.
In which of the following situations would an undisclosed principal be liable to the third party on a contract? Group of answer choices The agent was acting within the scope of his or her authority. The principal retained the benefits of the contract. The contract negotiated by the agent was not for the agent's personal services. The principal is liable in all of the situations above.
The principal is liable in all of the situations above.
Which of the following statements is false about a principal's ratification of an authorized contract? Group of answer choices The principal must have been either disclosed or partially disclosed at the time the contract was formed. The principal may not change any of the provisions of the contract. The principal must be aware of all material facts surrounding the negotiations and formation of the contract. The third party must not have withdrawn from the contract.
The principal must have been either disclosed or partially disclosed at the time the contract was formed.
A master can normally avoid liability for damages caused by a servant if he can show that the servant misunderstood his instructions. Group of answer choices True False
True
A person who enters into a contract with an independent contractor is called a proprietor. Group of answer choices True False
True
A plaintiff who sues the employer and the employee in joint and several liability is limited to only one recovery. Group of answer choices True False
True
A principal has the duty to notify third parties when an agency terminates. Group of answer choices True False
True
A principal may ratify a contract by accepting the benefits of the contract. Group of answer choices True False
True
A principal whose identity is known to a third party is a disclosed principal. Group of answer choices True False
True
A proprietor will be liable for the torts of an independent contractor if the duties that the contractor is hired to perform are inherently dangerous to the public. Group of answer choices True False
True
Agents are personally liable to third parties on contracts when the principal was undisclosed. Group of answer choices True False
True
An agency will terminate by operation of law if the principal files for Chapter 7 bankruptcy. Group of answer choices True False
True
An agent is a fiduciary of the principal. Group of answer choices True False
True
An agent who comingles the principal's funds with his or her own violates the duty to account. Group of answer choices True False
True
An agent who is wrongfully terminated may sue the principal for damages. Group of answer choices True False
True
An agent who represents both the buyer and the seller in the purchase of a business is acting as a dual agent. Group of answer choices True False
True
An agent will not be indemnified for injuries caused to third parties if the agent's negligence caused the injury. Group of answer choices True False
True
An agent's duty to protect confidential information continues even after the agency relationship ends. Group of answer choices True False
True
If a principal wishes to ratify a contract that an agent was not authorized to negotiate, he must do so before the third party withdraws from the contract. Group of answer choices True False
True
If an agent gets a monthly advance against future commissions, the advances are treated as a minimum salary and need not be returned if the commissions on sales are not earned. Group of answer choices True False
True
If the agent dies, the agency agreement terminates by operation of law. Group of answer choices True False
True
If the principal dies, the agency agreement terminates by operation of law. Group of answer choices True False
True
In a multiple listing agreement, real estate is listed with several brokers who divide the commission on the sale. Group of answer choices True False
True
Masters and servants have only joint liability for torts committed by the servant in the course of his employment. Group of answer choices True False
True
Normally a master is not liable for torts committed by a servant while traveling from his home to the workplace. Group of answer choices True False
True
The general manager of a business will have the implied actual authority to perform duties that are not expressly authorized in the employment agreement. Group of answer choices True False
True
The secret formula for a soft drink is an example of a trade secret. Group of answer choices True False
True
To ratify a contract, the principal must have been disclosed at the time the contract was formed Group of answer choices True False
True
Under the family-car doctrine, any family member becomes an agent of the parent-owner while the family member is using the car. Group of answer choices True False
True
If a third party does not know that he is dealing with an agent and believes that the agent is acting on his own behalf and will perform on the contract, the principal in this situation is ______________. Group of answer choices Disclosed Undisclosed Partially disclosed Transparent
Undisclosed
The general legal doctrine that holds one person responsible for the torts committed by another because of the relationship they have to each other is _______________ Group of answer choices Respondeat superior Vicarious liability Primary liability Transferred liability
Vicarious liability
The general legal principal under which an innocent person can be held liable for the wrongdoing of another is Group of answer choices The rule of transferred intent The rule of ultra vires The rule of corporate complicity Vicarious liability.
Vicarious liability.
Which of the following is not a factor in determining if a servant was acting within the scope of his employment? Group of answer choices Was the servant carrying on the master's business when the tort was committed? Was the servant disobeying the instructions of the master when the tort was committed? Was the instrumentality of the injury furnished by the master? Did the master authorize the servant to use the instrumentality of the injury?
Was the servant disobeying the instructions of the master when the tort was committed?
The last semester of his senior year, Marc had an unpaid internship in the sales department of a local TV station. When Marc left, he took a copy of the station's client list with him, reasoning that it would prove useful in the future when he graduated and got a permanent job at some other company in sales. Has Marc violated any agency duties? Group of answer choices No, it was an unpaid position so he had no agency duties. No, Marc's duties to the TV station ended when his agency relationship ended. Yes, Marc violated a duty to protect confidential information Yes, Marc violated a duty not to be negligent
Yes, Marc violated a duty to protect confidential information
Parker is a dealer in Oriental antiques and rugs. A sign in his store recommends that customers bring in their rugs to him for cleaning and repair. In fact, Parker does none of the cleaning or repair work himself. He sends the rugs to Local Cleaners, for whom he works as an agent making a 20 commission. Due to a mishap at Local's plant, the rug belonging to Parker's customer was damaged. Is Parker liable to the customer for the damage? Group of answer choices No, Parker is Local's agent and has no fiduciary duties to third parties. No, Parker has no liability because he was acting within the scope of this authority as Local's agent. No, Parker has no liability because agents are not responsible for the torts of the principal. Yes, Parker is liable because he is the agent of an undisclosed principal.
Yes, Parker is liable because he is the agent of an undisclosed principal.
Tim is the delivery person for a small local bakery. Tim often accepts payments from the bakery's customers when making his deliveries. Tim puts the payments that made by check in an envelope. He uses the cash payments to pay for his daily personal expenses. At the end of each week, he makes out a check to the bakery for the amount that he took in as cash payments. Has Tim breached any of his fiduciary duties as an agent? Group of answer choices Yes, the duty not to be negligent Yes, the duty to account Yes, the duty of loyalty No, so long as he keeps careful accounts and gives the bakery all that it is due.
Yes, the duty to account
An agent incurs personal liability on a contract with a third party when Group of answer choices he acts outside the scope of his authority in negotiating the contract he is an agent for an undisclosed principal he is an agent for a partially disclosed principal all of the above would impose personal liability on the agent .
all of the above would impose personal liability on the agent .
Which of the following is not an example of a trade secret? Group of answer choices A business's marketing plans for the next five years A list of customers that was published in an ad in a trade journal The formula for a compound used in a manufacturing process The responses of a focus group to a company's product that have been gathered and analyzed.
A list of customers that was published in an ad in a trade journal
