Business Law II Final

A plumber hired to redo the plumbing in a building is an independent contractor and agent of the owner of the building.

False

Agents and principals have mutual fiduciary duties to one another.

False

Any modification of a contract originally within the Statute of Frauds must be in writing to be enforced.

False

Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

False

Contracts for the sale of goods costing $300 or more must be in writing to be enforceable.

False

Edward writes to Judy, who was in the business of purchasing goods for others, telling her to purchase certain goods and ship them to him. Before answering Edward's letter, Judy does as directed and charges the goods to Edward. Judy was not authorized to do this because an agency relationship did not yet exist between Edward and Judy.

False

If an agent acting within his actual authority does not tell the third party that he is working in an agency capacity, the principal is not bound.

False

Leslie, the owner of a shoe store, purchased 500 Model XT-50 running shoes from her supplier, but price was not stated in the contract. The contract is voidable at Leslie's option until the parties agree on a price.

False

Ordinarily, an agent may delegate his duties to an equally qualified subagent.

False

Roy is the promoter of a new corporation that has not yet been incorporated. On behalf of the as-yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name. The corporation is liable on the contract, because Roy is its agent.

False

The UCC treats merchants more leniently than others in transactions involving goods.

False

The power of the principal to terminate an agency is unlimited.

False

When an agency agreement does not mention an amount of compensation for the agent, the principal is under no obligation to pay for the agent's services.

False

Robert advances money to John so that John can purchase inventory for his business. In return and for security on the loan, John makes Robert his agent.

Robert's agency is irrevocable.

Which of the following is true regarding an agent who is acting for an undisclosed principal?

The agent with actual authority will bind both himself and the principal on most contracts

Which of the following transactions is governed by Article 2 of the UCC?

The sale of oranges to be picked from a 10-acre grove

"Goods" for purposes of the Code are essentially tangible, movable personal property.

True

A court faced with an unconscionable lease contract may refuse to enforce the entire contract.

True

A person having interests adverse to that of another is generally not permitted to act as an agent for that other person.

True

A prompt promise to ship or prompt shipment of goods is a valid acceptance of an offer to buy goods for prompt or current shipment.

True

An agent can bind the principal to a contract with apparent authority.

True

An agent for a partially disclosed principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not.

True

An agent is personally liable for the torts he commits while in the scope of his employment.

True

An agent who makes a contract with a third person on behalf of a disclosed principal usually is not a party to the contract.

True

An attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction.

True

Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent. In reality, Ann had no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

True

As a general rule, a person may do through an agent whatever business activity he may accomplish personally.

True

Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained. Edward sells the goods in a market that is glutted and obtains a low price, even though he could have obtained a higher price in a nearby market by using more care in obtaining the available market information. Edward is liable to Diane for breach of the duty of diligence.

True

The CISG does not apply to sales of goods for personal, family, or household use.

True

The CISG governs contracts for the international sale of goods between parties located in different nations that have ratified the CISG.

True

The Code provides that its remedies shall be liberally administered to place the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed.

True

The Second Restatement provides that the death of a principal terminates all authority of an agent, including apparent authority, even though no notice is given to third parties.

True

The common law "mirror image" rule has been modified by the Code.

True

The contract liability of the principal may depend upon whether the principal is disclosed, partially disclosed, or undisclosed.

True

The fiduciary duty of an agent has a bearing upon his ability to act on behalf of a competitor of his principal.

True

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

True

The principal cannot revoke an agency coupled with an interest.

True

Under the Code, a contract to sell or lease personal property is recognized whenever the parties manifest such an intent, even if they cannot identify a precise moment the contract was formed.

True

Unless an auction is advertised or announced as being without reserve, the sale is with reserve, and the auctioneer may withdraw the goods at any time until he announces completion of the sale.

True

Unless the parties provide otherwise, place of delivery of goods is seller's place of business.

True

When a principal wrongfully revokes an agent's authority, the agent may recover money damages for breach of contract.

True

When conduct of the parties terminates an agency, the agent's apparent authority continues with respect to some third persons until actual notice of the termination is given to them.

True

Where both the CISG and the U.C.C. apply to a transaction, the CISG preempts the U.C.C.

True

An agent acts for a(n) ____ principal when she appears to be acting on her own behalf and the third person with whom she is dealing has no knowledge that she is an agent.

undisclosed

Duties owed by a principal to an agent that are contractual in nature include

indemnification

Which of the following is not a duty an agent owes to the principal?

ratification

The Code's sales provisions are

subject to change by contracting parties

An agent is liable to the third person if the agent

A) commits a tortious act B) acts for an undisclosed principal <C) all of these> D) exceeds the authority granted by the principal

The UCC provides rules, where the parties do not set forth terms in their contract, to cover:

A) terms of payment. B) place of delivery. C) particulars of performance. <<D) All of the above.>>

A contract which does not satisfy the writing requirement of the Article 2 statute of frauds, but which is otherwise valid, is enforceable in which of the following situations?

All of the above are situations where the contract would be enforceable.

Apparent authority may arise in all but which of the following ways?

An agent tells the third person she has the authority to transact such business on behalf of the principal.

Bryant, doing business as Fair Realty, employs Chris and Deborah as salespersons. Tammy contracts with Bryant to sell her house because she is aware of the good reputation of Fair Realty's salespersons. In this situation:

Chris and Deborah are employees/agents of Fair Realty and subagents of Tammy, and they have authority to show Tammy's house to prospective purchasers and to make representations about the house.

Which of the following is NOT a major duty which the agent owes to his principal?

Duty to indemnify.

Which of the following is correct with regard to actual notice to a third party of the termination of an agent's authority to act on behalf of the principal?

If notice is given by mail, it is effective as actual notice upon delivery to the third party.

John agreed to build a new house for Ted. Unknown to John, Ted was an agent for Russell Realty. John built the house as agreed. When Ted refused to pay, John became aware that Ted was an agent for Russell. John wants to sue on the contract. Under the Second Restatement:

John can sue either Ted or Russell.

Mark hires Joe's real estate agency to sell his estate, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then Mark wins the three million-dollar lottery! Joe reads this in the newspaper and that afternoon makes a contract with Sharon to sell the estate. Is the contract valid?

No, the agency terminated because of the change in conditions.

Contractual duties of a principal to an agent include all but the duty to:

account for financial benefits.

Under the Restatement, basic elements of an agency relationship include

authorization/consent

Principal Paul and Agent Abel enter an agreement whereby Abel agrees to sell, for a fee, Paul's pickle packing plants. Shortly after reaching their agreement, Paul, having inhaled excessive amounts of pickling vapor, is adjudicated mentally incompetent and Abel is confined to a hospital with a severe case of shingles. Their relationship

ceases through subsequent incapacity

A(n) ____ is a type of transaction generally involving three parties instead of two.

finance lease