BLAW Chapter 14 MC UNL
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
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
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
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
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 the 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
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 t
a
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
b
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
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
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
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
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
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
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
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
If an agency agreement did not specify how much an agent would be paid for his work, the principal has a "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
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
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
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
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
The duty of of any third party: a. accounting b. loyalty c. performance requires an agent to place the principal's interests before the agent's personal interests or those d. reasonable care e. none of the other choices; there is no such duty
b
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 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
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 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
The principal has a agency. a. duty to inform b. duty to cooperate c. duty to compensate d. duty to reimburse e. duty to indemnify with her agent by performing responsibilities defined in the agreement forming the
b
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
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
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
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
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
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
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
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
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
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
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
Because of the principal. an agent may not represent another party whose interests are in conflict with those of the a. duty of non-competition b. duty of cooperation c. duty of loyalty d. duty to reimburse e. duty of obedience and performance
c
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
An agency through the 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
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
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
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
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
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
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 an agency by operation of law e. none of the other choices
d
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
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
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
When a principal creates an impression of authority in an agent that leads the 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
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
Which of the following determines the scope of authority given to an agent: a. statements of the principal b. the principal's conduct c. the trade customs in business d. all of the other specific choices are correct e. none of the other specific choices are correct
d
Which of the following is part of the principal's duty to cooperate: a. providing a safe working environment b. warning the agent of any unreasonable risk associated with the agency c. not furnishing goods of inferior quality to the agent d. all of the other specific choices are correct e. none of the other choices are correct
d
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
. 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
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
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
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
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
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
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
