Law: Chapter 36

John's son was not his agent but contracted to purchase a computer in the name of John. When John learned of this, John sternly rebuked his son but continued to use the computer for several weeks. After losing interest in the computer, John offered to return it, saying that the purchase was unauthorized. John: a. is not liable on the purchase b. expressly ratified the purchase c. is liable because all children have the apparent authority to contract for their parents d. ratified the purchase by John's conduct

d. ratified the purchase by John's conduct

The third person who desires to bind the principal because of the act of an alleged agent has the burden of proving that the latter person was in fact the authorized agent of the principal and possessed the authority to do the act in question.

True

When an unauthorized act is ratified, the effect is the same as though the act had been originally authorized.

True

Which of the following is NOT a necessary condition for ratification? a. the agent must have purported to act on behalf of or as an agent for the identified principal b. the third party benefiting from the ratification must give consideration for the ratification c. the principal must have been capable of authorizing the act both at the time of the act and at the time it was ratified. d. the principal must have full knowledge of all material facts

b. the third party benefiting from the ratification must give consideration for the ratification

An agent has implied________authoirty to do any act that usually accompanies the transaction for which the agent is authorized to act a. express b. apparent c. customary d. incidental

c. customary

A(n)______is bound by a contract to produce a certain result, with performance of the work controlled by the_____ a. agent, principal b. employee, employer c. independent contractor, contractor

c. independent contractor, contractor

The term apparent authority is used when there is:______ a. no interaction between the principal and the third persons b. actual authority c. only the appearance of authority and that appearance of authority was created by the principal d. only the appearance of authority and that appearance of authority was created by the agent.

c. only the appearance of authority and that appearance of authority was created by the principal

A durable power of attorney may be terminated by:_______ a. revocation by a competent principal b. death of the principal c. revocation by a competent principal or by the death of the principal d. none of these, since a "durable" power of attorney is designed by law to be irrevocable under all circumstances

c. revocation by a competent principal or by the death of the principal

The principal has a duty to perform all of the following EXCEPT:______ a. a duty to perform the contract according to its terms b. a duty to compensate the agent for services c. a duty to indemnify the agent for loss in some circumstances d. a duty of loyalty to the agent

d. a duty of loyalty to the agent

It is the duty of an agent to act with the care that:______ a. the principal would exercise under the circumstances b. a reasonable principal would exercise under the circumstances c. a reasonable juror would exercise under the circumstances d. a reasonable person would exercise under the circumstances

d. a reasonable person would exercise under the circumstances

A(n)______gives an agent an interest in the property with which she is dealing a. special agency b. agency with an interest in authority c. general agency d. agency with an interest in the subject matter

d. agency with an interest in the subject matter

The scope of an agent's authority may be determined from all of the following EXCEPT:_______ a. express words of the principal b. actions of the principal c. customs of the trade or business d. consideration paid to agent

d. consideration paid to agent

An agent's implied authority to perform any act reasonably necessary to execute express authority is called_______authority. a. express b. customary c. apparent d. incidental

d. incidental

An agent has incidental authority to perform any act reasonably necessary to execute the express authority given to the agent

True

An employer does not have control over the performance of the work done by an independent contractor

True

For ratification to occur, the agent must have purported to act on behalf of, or as agent for, the identified principal

True

The "Right to Control" test determines whether an individual is an agent, an employee, or an independent contractor.

True

The Uniform Durable of Attorney Act (UDPAA ) changes the general rule that insanity of a principal terminates an agent's authority to act for the principal

True

The acts of the agent obligate the principal to the third persons and give the principal rights against third persons

True

The intention to ratify an unauthorized act may be expressed by words or conduct

True

The term apparent authority is used when an appearance of authority has been created by a principal, but actual authority does not exist

True

If a principal terminates an agency without giving notice of the termination to third persons, the agent may retain the power to make contracts that will bind the principal and the third persons

True

In performing agency duties, the agent must exercise the care that a reasonably prudent person would exercise under the same circumstances

True

Notification to a principal may be implied when the principal does not object to a contract and accepts its benefits

True

An agency may arise by appointment, conduct, ratification, or operation of law

True

A general agent is authorized by the principal to do all acts that can be delegated lawfully to a representative

False

A principal may ratify an action taken by an agent that the principal would have not been capable of authorizing at the time the action was taken

False

A special agent is authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business as a certain place

False

A third person who deals with a person claiming to be an agent has the right to rely on the statements made by the agent concerning the extent of the agent's authority

False

A universal agent is authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place

False

An agent is distinguished from an ordinary employee in that employees are always hired to represent the employer in dealings with third persons

False

For a principal to ratify the actions of an agent, all that is necessary is that the principal express the intention to ratify

False

Placing property in the possession of another gives that person apparent authority to sell the property

False

The scope of an agent's authority is always known by the third party

False

When a principal dies, the agency is not terminated until the agent is notified of the principal's death

False

An agent has an interest in the authority when consideration has been given or paid for the right to exercise the authority

True

A contractors work can be so controlled by the hiring party that the contractor is regarded as an employee of the hiring person

True

A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance

True

A person who has knowledge of a limitation on an agents authority cannot disregard that limitation

True

A written authorization of agency is called Power of Attorney

True

An agency coupled with an interest is not terminated by death of the principal

True

If the principal terminates the agency:_______ a. the agent's authority to act for the principal is terminated automatically b. the right of the agent to bind the principal to third persons generally ends immediately c. the termination is not effective until notice is given to third parties d. the termination is not effective until the agent receives notice

b. the right of the agent to bind the principal to third persons generally ends immediately

If a store owner places Joe as manager and gives him a special name tag, customers may assume that Joe has_______for the owner in that respect a. apparent authority b. ratification powers c. special agency d. universal agency

a. apparent authority

The most common method of creating an agency is by: ______. a. express authorization b. conduct c. operation of law

a. express authorization

Initially, ratification is a question of:______ a. intention b. consideration c. form d. implication

a. intention

A_______agent is authorized by the principal to handle a definite business transaction or to do a specific act. a. special b. general c. secret d. universal

a. special

A party working for and under the control of another and authorized to enter into contracts for that other person or entity is called an ______ a. employee b. agent c. independent contractor d. attorney

b. agent

An agent is under a duty to obey:_______ a. all instruction given by the third party b. all lawful instructions given by the principal. c. all instructions given by the principal d. none of these, since "obedience" is not an obligation of the agent

b. all lawful instructions given by the principal.

An agent appointed by a power of attorney is referred to as an:______ a. implied attorney b. attorney in fact c. implied agent d. attorney at law

b. attorney in fact

A third person who deals with a person claiming to be an agent:_______ a. can rely on the statements made by the agent regarding the extent of the authority b. cannot ignore any knowledge regarding a limitation of the agent's authority c. is required to take notice of any acts clearly adverse to the interest of the principal d. is bound by the agent's secret limitations, regardless of the third persons knowledge

b. cannot ignore any knowledge regarding a limitation of the agent's authority