Business Law Ch. 16 Quiz

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The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent.

Fakse

A gratuitous agent can be liable to a principal for breach of contract, even in the absence of a contract, but not liable for the negligent performance of the deal.

False

An agency relationship is based on the attributes of power, control, and financial self-interest—not the trust and confidence of a fiduciary relationship.

False

Both parties to an agency relationship have the power and the right to terminate the relationship at any time.

False

The agent must maintain separate accounts for the principal's funds and for the agent's personal funds, but may intermingle these accounts.

False

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

False

The principal is bound by the agent's unauthorized act, unless the principal negates it.

False

When an agent, acting within the scope of his or her authority, contracts with a third party, in no circumstance is the agent liable to the third party.

False

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

True

A truck driver who drives a company truck on a regular basis is most likely an employee.

True

An agency relationship can arise by ratification, which involves a determination of intent expressed by words or conduct.

True

Any person can be an agent, regardless of whether he or she has the capacity to contract.

True

If an agent has represented himself or herself as possessing special skills, the agent is expected to use them.

True

Under the principles of agency law, any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store.

True

When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party.

True


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