Business Law I -- Chapter 17 -- Agency -- Cengage Mind Tap / Quiz

Because the undisclosed principal (13) ___ the same entity as the disclosed principal, and that undisclosed principal (14) ____ perform on the contract, a court likely (15) ____ find that Ken Manos is liable on the contract.

13. is 14. cannot 15. will

At trial, Manos claimed that he was an agent for (4) ____ and claimed that OutCreate was just another name for (5) ______ . Forest Green (6) ______ mentioned in the contract and would be (7) _____ principal. This type of principal generally is (8) ______ bound to perform the contract.

4. Forest Green Landscapes and Irrigation, Inc. 5. Forest Green Landscapes and Irrigation, Inc. 6. was not 7. an undisclosed 8. is

Mohammad was an employee in the new product development department of Estay Inc. Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months. Estay took great care to keep information concerning the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to leave Estay to direct Ceries' marketing department. Which statement is correct? Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency. Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated.

Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency.

Nikki was an tax accountant with HBR Accounting. Nikki decided to do some tax consulting in the evenings and on weekends. HBR is unaware of Nikki's consulting work. Which statement is correct? Nikki has not breached a fiduciary duty to HBR since her behavior does not reflect badly on the accounting firm. Nikki has not breached a fiduciary duty to HBR since her consulting is done after her work for HBR. Nikki has breached a fiduciary duty to HBR since she is competing with HBR. Nikki has not breached a fiduciary duty to HBR since Nikki has a contractual relationship with her clients, not her employer.

Nikki has breached a fiduciary duty to HBR since she is competing with HBR.

Heather is an artist and has several watercolors she would like to sell. Heather orally asks Rylee to sell the paintings for her and directs Rylee that each painting should be sold for at least $100. Rylee schedules a showing in her art gallery to display Heather's paintings. On the day of the showing, a customer offers to buy one of the paintings for $100, and Rylee accepts. When Heather finds out the price the painting sold for, she tries to get the painting back from the customer. Heather claims that she and Rylee did not have a written agency agreement, and, therefore, an agency relationship did not exist between them. Is Heather correct?

No, most agency agreements do not have to be in writing to be effective.

Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15-year-old boy, to operate an industrial machine. Hiring the 15 year old violates the child labor laws. What should Tom do in this situation? Tom should hire Elton; he has a duty of care to ensure that the government does not discover that Elton is 15 years old. Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical. Tom should not hire Elton; he has a duty of care and he would not be caring for Elton. Tom should hire Elton; he has a duty to obey Esday's instructions.

Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical.

Grover is a sales representative for Avon Products Inc., a company that sells beauty and gift products door-to-door. Ruby, Grover's manager, assigns Grover a certain territory in which to work. The territory that Grover is assigned has historically had one of the highest sales records in the state. Ruby is concerned that Grover is not adequately working the territory, so she allows Regina to also sell in that same territory. Does Grover have any grounds on which to file a lawsuit against Ruby?

Yes, Ruby has violated a principal's duty of cooperation and may be liable to Grover for Grover's lost profit.

Janet was employed as a sales representative for Esday, Inc. An appreciative customer gave her a diamond bracelet for all her hard work on a complicated contract. Can Janet keep the bracelet? No. An agent is not allowed under any circumstances to personally profit as a result of the agency relationship. Yes. The bracelet was given to Janet personally and intended for her. No. The bracelet is regarded as an unfair trade practice and violates antitrust law. Yes, but only if she discloses the gift to Esday and Esday consents to her keeping the bracelet.

Yes, but only if she disclosed the gift to Esday and Esday consents to her keeping the bracelet.

An agent may not engage in inappropriate behavior that reflects badly on the principal. This rule applies to conduct - during off-duty time. - during both working hours and off-duty time. - only by public officials. - during working hours.

during both working hours and off-duty time.

Chance is a traveling marketing representative for a publishing company. He is an independent contractor and was hired without negligence. One afternoon while driving to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is injured. Judy can - not hold Chance or his company liable for her injury. - hold both Chance and his company liable for her injury. - hold the company but not Chance liable. - hold Chance but not the company liable.

hold Chance but not the company liable

Circus Pizza contracted with Art to run its birthday parties. Art's responsibilities included supervising the children and organizing the games. Circus did not investigate Art's background, which included a history of assaulting children. Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party. Circus Pizza may be held liable on the basis of negligent hiring. may be held liable only if Circus actually knew of Art's background. cannot be held liable for the damages because Art's conduct was not in the scope of employment. cannot be liable for the damages because Art committed an unforeseeable intentional tort

may be held liable on the basis of negligent hiring.

OutCreate would be (1) _______ principal in the contract. This type of principal is (2) ________ liable to a third party for contracts made by its agents. In this situation, OutCreate (3) _____ liable on that contract.

1. a disclosed 2. is 3. is

once (9) _____ principal's identity is revealed, the third party generally (10) _____ hold either the principal or the agent liable on the contract. Forest Green is (11) ___ and therefore (12) _____ perform the contract.

9. an undisclosed 10. can 11. bankrupt 12. cannot

An agency relationship can be created (a) by the conduct of the parties. . (b) only by the meeting of all the standards of contract law. (c) only if the agent is paid. (d) only by a written agreement.

By the conduct of the parties

John hired Tim to sell his house. Which statement is correct? John is Tim's principal. Tim is John's principal. Tim, but not John, can terminate the agency relationship. John, but not Tim, can terminate the agency relationship.

John is Tim's principal

Marlo is about to be transferred overseas and wants to sell her house. Julianna, who is not a real estate agent, offers to sell the house for Marlo for free. Marlo jumps at the chance to get such a valuable service for free! Because Julianna offered to sell the house for free, Julianna owes Marlo:

No duty to sell the house, but if Julianna does attempt to sell the house, she owes Marlo the duty to use reasonable diligence and skill in performing the task.

An agency agreement terminates if the activity involved becomes illegal. True False

True

Jolene hired Lacy to find a buyer for her house. Adam was interested in buying the house. If both Jolene and Adam agree, Lacy, a real estate agent, may represent both parties.

True

If the principal and agent agree in advance how long their relationship will last, their agreement is called an agency at will. a term agreement. an agency of purpose. an express agreement.

a term agreement

Pamela hired Lena to sell her business. Lena can buy the business as long as she qualifies for financing. can buy the business only with Pamela's permission. can buy the business as long as the price is fair. cannot buy the business under any circumstances.

can buy the business only with Pamela's permission

Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of apparent authority. respondeat superior. intermediary agency. express authority.

express authority

In its most basic terms, a fiduciary relationship is one of disclosure. trust. competition. control.

trust

Isaiah wants to build a new shopping complex. He is afraid that once news gets out about his plans, the price of the land where he wants to build the shopping complex will increase in price. Isaiah, therefore, hires Landon to purchase the parcels of land for him and to keep the fact that Landon is working for Isaiah a secret. Landon enters into a written contract for the sale of the land with Miriam and does not tell Miriam that Landon is an agent for anyone else on the deal. Isaiah refuses to buy the property from Miriam. Is Landon obligated to perform the contract with Miriam?

yes, he is because there was an undisclosed principal who failed to perform.

In the case of an undisclosed principal, a third party can only recover from the principal. can recover from either the agent or the principal. cannot recover at all. can only recover from the agent.

can recover from either the agent or the principal

The principle of liability stating that an employer is liable for a physical tort committed by an employee acting within the scope of employment and a nonphysical tort of an employee acting with authority is called apparent authority. the equal dignities rule. fiduciary control. respondeat superior.

respondeat superior

Roland and Alfreeda enter into a written agency agreement in which Alfreeda will represent Roland as his agent to obtain acting jobs for Roland. No termination provisions are included in the written agreement. If Roland wishes to terminate his agreement with Alfreeda:

Roland must do so in writing because the agency agreement is in writing.

Erica's supervisor told her to arrange for a conference room at the Kelly Inn. Erica has express authority to contract for the room. True False

True

If Denise is hired to work as a cashier, she has the implied authority to do acts reasonably necessary to carry out her job. True False

True

Under these facts, the landscaper in the contract is (16) ____ . Because of the phone conversation between Manos and the Elba family, Forest Green is (17) ____ liable on the contract.

16. Outcreate 17. a disclosed 18. is

And because of the type of agency, Manos (19) ____ liable on the contract. Under these facts, the court (20) _____ dismiss Manos from the suit.

19. is not 20. should

Mrs. O'Leary hired Jenna to sell her house in Michigan. She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate, acting as a prudent person." On May 30, Jenna finalized a deal with Brandon for the purchase of the house. Brandon and Jenna signed the real estate contract that day. Jenna learned the next day that Mrs. O'Leary had died May 29. The contract is void since the agency terminated May 29. The contract is voidable at the option of Brandon. The contract is valid since the agency's purpose was achieved before Jenna was notified of Mrs. O'Leary's death. The contract is voidable at the option of Mrs. O'Leary's estate.

The contract is void since the agency terminated May 29.