exam 3-business law

8) Which of the following is true of a principal-independent contractor relationship? A) Principals are bound by the authorized contracts of their independent contractors. B) Independent contractors cannot be authorized by principals. C) Independent contractors are employees of the principals. D) Principals cannot directly employ independent contractors.

A) Principals are bound by the authorized contracts of their independent contractors.

25) Which of the following is true about a special power of attorney? A) It is an implied form of power of attorney. B) It limits the agent's powers to those enumerated in the agreement. C) It allows the agent to act in any matters on the principal's behalf. D) It only allows a licensed attorney to act as the attorney-in-fact.

B) It limits the agent's powers to those enumerated in the agreement.

2) The ________ is the party who employs another person to act on his or her behalf. A) agent B) principal C) independent contractor D) employee

B) principal

9) A(n) ________ is a relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf. A) agent-independent contractor relationship B) principal-agent relationship C) agent-agent relationship D) employer-employee relationship

B) principal-agent relationship

21) Which of the following is true of an express agency? A) It can be either oral or written unless the Statute of Frauds stipulates that it must be written. B) It is implied from the actions or conduct of the parties. C) It originates when the principal ratifies an unauthorized act. D) It arises when a principal creates the appearance of an agency that does not exist.

A) It can be either oral or written unless the Statute of Frauds stipulates that it must be written.

17) A party who employs another person to act on his or her behalf is known as a(n) ----.

PRINCIPAL

5) Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris is paid for his services. Who performs the role of the agent in this land sale transaction? A) William B) Martin C) Chris D) George

A) William

1) Who is an agent? A) a party who agrees to act on behalf of another B) a party who employs another person to act on his or her behalf C) a party who directs a worker under an express or implied contract of employment D) a party who receives the services of another for remuneration

A) a party who agrees to act on behalf of another

3) Which of the following constitutes an agency? A) a principal-agent relationship B) an agent-agent relationship C) a principal-principal relationship D) an agent-independent contractor relationship

A) a principal-agent relationship

10) Which of the following types of relationships exists when a person hires another person to perform some form of physical service but does not authorize that person to enter into contracts on his or her behalf? A) employer-employee relationship B) employer-agent relationship C) principal-third party relationship D) principal-agent relationship

A) employer-employee relationship

6) Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris is paid for his services. In this scenario, who is the principal during the land sale transaction? A) ReNowait Goodhouses B) George C) Martin D) William

C) Martin

19) Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon must not hire another broker to sell that piece of land until the expiration of the contract period. Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services. What kind of contract existed between Marlon and Nita? A) an apparent agency contract B) a ratified contract C) an exclusive agency contract D) an exclusive principal contract

C) an exclusive agency contract

22) A power of attorney is an example of an ________ agreement. A) agency by ratification B) apparent agency C) express agency D) implied agency

C) express agency

11) Which of the following is true of an employer-employee relationship? A) An employee has implied power of attorney toward the principal. B) An employee has authority to act on behalf of the principal. C) An employee can enter into contracts on behalf of the employer. D) An employee is hired to perform a task or service.

D) An employee is hired to perform a task or service.

23) Which of the following is true of a general power of attorney? A) It can be based on a conversation between the principal and agent. B) It must appoint a licensed attorney to act as the attorney-in-fact. C) It is one of the most informal types of express agency agreements. D) It allows the agent to sign legal documents on the principal's behalf.

D) It allows the agent to sign legal documents on the principal's behalf.

24) Taylor gives a power of attorney to his twin brother Corey, permitting Corey to make all decisions on his behalf while he is abroad. As per the terms of the power of attorney, Corey is allowed to make decisions to purchase or sell stocks on Taylor's behalf, sell Taylor's real estate if he deems it to be in Taylor's best interest, pursue or defend lawsuits on Taylor's behalf, and make all other relevant decisions for Taylor. What kind of power of attorney confers such powers to Corey? A) a special power of attorney B) a limited power of attorney C) an implied power of attorney D) a general power of attorney

D) a general power of attorney

7) Martin, who wants to sell his house, authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris is paid for his services. In this scenario, what type of commercial relationship exists between Martin and William? A) an employer-employee relationship B) an agent-agent relationship C) an agent-independent contractor relationship D) a principal-agent relationship

D) a principal-agent relationship

4) A(n) ________ is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.

D) agency

18) Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon must not hire another broker to sell that piece of land until the expiration of the contract period. Nita finds a suitable buyer, makes the sale in time, and Marlon pays for her services. Which of the following types of agencies had Marlon and Nita entered into? A) apparent agency B) agency by ratification C) implied agency D) express agency

D) express agency

20) An agency that occurs when a principal and an agent categorically agree to enter into an agency agreement with each other is known as an ________. A) agency by ratification B) implied agency C) apparent agency D) express agency

D) express agency

13) A principal works on behalf of an agent.

FALSE

14) A principal-agent relationship exists when an employer hires an employee to perform some form of physical service.

FALSE

15) A party that employs an independent contractor is called an agent.

FALSE

16) An employer-employee relationship occurs when an employer gives an employee the authority to act and enter into contracts on his or her behalf.

FALSE

12) Agency law is a mixture of contract law and tort law.

TRUE