Business Law 2

The most important duty an agent owes to a principal is the duty of _______.

loyalty

An agent who makes an unauthorized agreement has failed to meet the duty of

obedience

Agency contracts do not need to be in writing unless an agent has been given power of authority or if the agent will be entering into a contract that the _______ requires to be in writing.

statute of frauds

When determining whether an apparent agency relationship exists, the court considers _______.

the acts of the principal

The primary differentiating factor between an employee and an independent contractor is the amount of _______ exercised by the employer.

control

An agency relationship may be based upon all but which of the following forms of authority?

Evidentiary

Which of the following is true of agency law?

It is primarily state law.

Which of the following is not a requirement for agency by ratification?

The principal must have incomplete knowledge of all material facts regarding the contract.

All but which of the following are required for an agency by ratification to be effective?

The principal must ratify all parts of the agent's act.

In an agency relationship, the _______ is authorized to act for and on behalf of the _______, who hires the _______ to represent him/her.

agent; principal; agent

Employees are _______ of an employer.

agents

A _______ power of attorney is a written document, created by a principal, expressing his or her wishes for an agent's authority not to be affected by the principal's subsequent incapacity.

durable

When an agent makes authorized expenditures in the course of working on behalf of the principal, and the principal refuses to pay the agent, the principal is violating his or her

duty to reimburse.

When a principal falsely leads a third party to believe that another individual serves as his or her agent, the principal has created agency by

estoppel

Someone who has a duty to act primarily for another person's benefit is a _______.

fiduciary

A fiduciary relationship consists of trust, confidence, and

good faith.

A principal has a right to _______ if a breach of contract occurs due to an agent's negligence.

indemnification

A(n) _______ is a person who contracts with another to do something for him/her, but who is not controlled by the other or subject to the other's right to control with respect to his/her physical conduct in the performance of the undertaking.

independent contractor