Acct 340 Chpater 29 quiz
Which of the following is NOT true regarding powers of attorney?
A power of attorney is one of the most formal types of express agency agreements.????????
An owner of a vacant lot enters into an agency agreement with a real estate agent to sell the lot for $1 million based on the agent's market analysis. After signing the agreement, the agent learns that oil has been discovered on the property, a discovery that makes the land worth $5 million. Which of the following is true?
The agency may be terminated because of this change in circumstances.
Which of the following is NOT true about an agent's duties?
The duty to account (sometimes called the duty of accountability) includes keeping records of all property and money received and expended during the course of the agency.??????????
Which of the following is an INCORRECT statement regarding express agencies?
Without exception, express agency contracts must be in writing to be enforceable.
An apparent agency is also known as an agency by _____.
estoppel
Section 1(1) of the Restatement (Second) of Agency defines agency as a(n) _____ relationship "which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control."
fiduciary
With a _____ power of attorney, a principal confers broad powers on the agent to act in any matters on the principal's behalf.
general
A general medical practitioner in a rural area would be held to the standard of a reasonable ________. A brain surgeon would be held to the standard of a reasonable ________.
general practitioner in rural areas; brain surgeon
In many situations, a principal and an agent do not expressly create an agency. Instead, the agency is inferred from the conduct of the parties. This type of agency is referred to as a(n) _____ agency.
implied
An agency terminates by _____ of performance because a situation arises that makes the fulfillment of the agency impossible.
impossibility
Which of the following is a duty an agent owes to a principal?
performance
A party who employs another person to act on his or her behalf is called a(n) _____.
principal
An agency can be legally terminated in all EXCEPT which of the following ways?
ratification of the contract by the principal
With a(n) _____ power of attorney, a principal confers powers on an agent to act in specified matters on the principal's behalf.
special
Olivia signs a document giving her sister the authority to act on her behalf while she undergoes surgery. This is known as a(n) _____.
special power of attorney
Olivia signs a document giving her sister the authority to sign any documents necessary to list her house for sale while she is on vacation. This is known as a(n) _____.
special power of attorney
Which of the following is NOT a duty a principal owes to an agent?
subrogation
An agency is terminated by operation of law in which of the following circumstances?
the bankruptcy of the principal
An agency is terminated by operation of law in which of the following circumstances?
the death of the principal
Which of the following circumstances can lead to termination of an agency by impossibility of performance?
the loss of a required qualification
Which of the following circumstances can lead to termination of an agency by impossibility of performance?
the loss or destruction of the subject matter of the agency
Whose actions create an apparent agency?
the principal's
Which of the following is an INCORRECT statement regarding the creation of an agency relationship?
Generally, minors can appoint agents.
Which of the following is NOT true about an agent's duties?
An agent who does not perform his or her express duties or who fails to use the standard degree of care, skill, or diligence is liable to the principal for damages.????????????
Which of the following is an INCORRECT statement regarding independent contractors?
As a general rule, employees are independent contractors.
Marty Levine sees a house for sale and thinks his friend Linda Maxwell would want to buy it. Marty enters into a contract to purchase the house from the seller and signs the contract "Marty Levine, agent for Linda Maxwell." Which of the following is NOT true?
Because Marty is now Linda Maxwell's agent, Linda is bound to the contract.
_____ agency is the most common form of agency.
Express
Which of the following is an INCORRECT statement regarding an agency by ratification?
For an agency by ratification to occur, an employer-employee relationship must exist between the principal and the agent.
An employer-employee relationship exists when an employer hires an employee to perform some form of physical service but does not give that person _____ authority to enter into contracts.
agency
A party who agrees to act on behalf of another is called a(n) _____.
agent
A principal-_____ relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.
agent
Siri, who is driving her automobile, is injured when another driver negligently causes an automobile accident. Siri hires a lawyer to represent her on a 35 percent contingency-fee basis. If the lawyer wins the case for Siri or settles the case with Siri's approval, he will earn 35 percent of whatever is collected from the defendant. If the lawyer does not win or settle the lawsuit, he gets paid nothing. The agent can recover this amount from the principal because of the duty to _______.
compensate
Notice that an agency has terminated that has been placed in the newspaper is an example of ___________.
constructive notice
Saachi, who owns a piece of vacant real estate, hires Maaksharth, a licensed real estate broker, to list the property for sale. Ian, an adjacent property owner to Saachi's property, tells the agent that a chemical plant has polluted his property and probably Saachi's property. The owner is unaware of any pollution and the agent does not tell her. If Saachi sells the property to Mabina and it is later discovered that the property Mabina bought from Saachi is polluted, would Saachi be liable?
Yes, the agent's knowledge is imputed to Saachi????????
Principals often employ outsiders—that is, persons and businesses that are not _____—to perform certain tasks on their behalf. These persons and businesses are called _____.
employees; independent contractors
A power of attorney is an _____ agency agreement that is often used to give a(n) _____ the power to sign legal documents on behalf of the _____.
express; agent; principal
