Business Law Ch. 16 Quiz
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
