Acct 324- exam 2 questions

Owen and Paula agree to operate an espresso stand. They purchase their supplies and split the costs equally. They agree to share profits equally, and decide that each of them will have an equal say in how the stand will operate. Nothing is put in written. Owen and Paula have formed a) A partnership b) A sole proprietorship c) A corporation d) Nothing because their agreement was not reduced to writing

a) A partnership

The duty to mitigate damages means that the party claiming a breach must a) Prove that the breaching party did so intentionally b) Lessen the impact of the breach by pursuing another job or tenant, or by cover c) Show receipts for all damages claimed d) Prove that the breaching party could foresee that the non-breaching party was going to lose money as a result of the breach

b) Lessen the impact of the breach by pursuing another job or tenant, or by cover

Under which of the following does a principal give authority to an agent only for the specific areas or purposes listed in the agency agreement? A.A specific power of attorney B.An exact order of authority C.An exact legal empowerment D.A limited power of responeat superior E.A specific power of order

A.A specific power of attorney

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory? A.Distributorship B.Manufacturing arrangement C.Chain-style business operation D.Approved business franchise E.Acknowledged standards operation

A.Distributorship

Which of the following is a term used to describe the duty of an agent to communicate any information to the principal that the agent thinks could be important to the principal? A.Duty of notification B.Duty of information C.Requirement of conveyance D.Constructive notification E.Constructive information

A.Duty of notification

Which of the following is true regarding the liability in tort of employers for the actions of employees and independent contractors? A.Employers are generally liable in tort for the actions of their employees, while they are generally not liable for the actions of independent contractors. B.Employers are generally liable in tort for the actions of independent contractors, while they are generally not liable for the actions of employees. C.Employers are not generally liable in tort for the actions of independent contractors or the actions of employees. D.Employers are generally liable in tort for the actions of independent contractors and for the actions of employees. E.Employers are generally liable in tort for the actions of independent contractors and for the actions of employees, but only if the employer has agreed to be liable in a written contract with the employee or independent contractor.

A.Employers are generally liable in tort for the actions of their employees, while they are generally not liable for the actions of independent contractors.

Which of the following is false regarding classification of principals? A.If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a disclosed principal. B.When the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is, the principal is a disclosed principal. C.An unidentified principal is in the same classification as a partially disclosed principal. D.If the third party does not know that an agent is acting on behalf of a principal, an undisclosed principal is involved. E.Classification of the principal is important because it helps determine the principal's liability.

A.If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a disclosed principal.

Which of the following is true regarding caps on punitive damages in Title VII cases based on discrimination other than race? A.Punitive damages are capped at $300,000 for employers of more than 500 employees. B.Punitive damages are capped at $50,000 for employers of between 100 and 200 employees. C.Punitive damages are capped at $25,000 for employers of between 25 and 50 employees. D.Punitive damages are capped at $75,000 for employers of between 50 and 200 employees. E.There is no cap on punitive damages.

A.Punitive damages are capped at $300,000 for employers of more than 500 employees.

Which of the following is false regarding a limited partnership? A.There must be at least one general partner. B. There must be at least two limited partners. C.The partnership must use the word "limited" in its title. D.The parties must file a certificate of partnership with a state office to create it. E.If a limited partner dies, the limited partnership is usually unaffected.

B. There must be at least two limited partners.

Which of the following specifies that the agent's authority is intended to continue beyond the principal's incapacitation? A.Special power of attorney B.Durable power of attorney C.Nonterminable power of attorney D.Permanent power of attorney E.Living power of attorney

B.Durable power of attorney

Which of the following is a business that exists because of an arrangement between the owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark? A.Joint venture B.Franchise C.Joint partnership D.Consensual seller E.Approved arrangement

B.Franchise

The Family and Medical Leave Act guarantees all eligible employees up to ______ weeks of leave during any ______-month period. A.4; 24 B.12; 24 C.12; 12 D.20; 12 E.20; 24

C.12; 12

The Fair Labor Standards Act mandates that employees, who are not exempt, who work more than ______ hours in a week be paid no less than one and one half times their regular wage for all the hours beyond ______ that they work during a given week. A.30; 35 B.35; 40 C.40; 40 D.45; 45 E.50; 50

C.40; 40

The Family and Medical Leave Act covers private employers with ______ or more employees. A.20 B.25 C.50 D.75 E.100

C.50

Which of the following is a group that comes together for the explicit purpose of financing a specific large project? A.A business trust B.A joint venture C.A syndicate D.A franchise E.An enterprise

C.A syndicate

Which of the following types of agency occurs when a principal leads a third party to believe another individual serves as his or her agent, but the principal has actually made no agreement with the so-called agent? A.Expressed agency B.Implied agency C.Apparent agency D.Ratification E.Endorsement

C.Apparent agency

Assuming requirements are met, which of the following, if any, is a way that a corporation can avoid double taxation? A.By forming a C corporation. B.By forming a D corporation. C.By forming an S corporation. D.By forming an F corporation. E.A corporation cannot avoid double taxation.

C.By forming an S corporation.

When a principal is classified as a[n] ______ principal, a third party is aware that an agent is making an agreement on behalf of a principal, and the third party also knows the identity of the principal. A.Acknowledged B.Permitted C.Disclosed D.Revealed E.Uncovered

C.Disclosed

Which of the following is not a type of independent contractor? A.Building contractor B.Stockbroker C.Elementary school teacher D.Lawyer E.Doctor

C.Elementary school teacher

Which of the following is a person who has a duty to act primarily for another person's benefit? A.Principal B.Employer C.Fiduciary D.Trustor E.Benefitor

C.Fiduciary

Which of the following is false regarding franchises? A.The franchisor can set sales quotas and record-keeping requirements. B.The franchisor has the legal authority to ensure that the franchisee maintains the quality of goods and services associated with the franchise. C.The UCC does not apply in the realm of disputes between franchisors and franchisees. D.A franchise is a contractual relationship between the franchisor and the franchisee. E.If a franchisor exercises too much authority in the day-to-day affairs of the franchisee's business, the franchisor could be held liable for the torts of the franchisee's employees.

C.The UCC does not apply in the realm of disputes between franchisors and franchisees.

Which of the following governs partnerships in most states in the absence of an express agreement? A.The Joint Partnership Act B.The Uniform Joint Agreement Act C.The Uniform Partnership Act D.The Associated Partnership Act E.The Joint Agreement Act

C.The Uniform Partnership Act

Which of the following is true regarding an agent's liability when the agent commits a tort while acting as an agent for a principal? A.The agent is personally liable only if the agent was on a mission for an unidentified principal. B.The agent is personally liable only if the agent was on a mission for an identified principal or a partially disclosed principal. C.The agent is liable regardless of the classification of the principal or the liability of the principal. D.The agent is not liable if the principal is liable. E.The agent is not liable unless the principal is insolvent.

C.The agent is liable regardless of the classification of the principal or the liability of the principal.

In states that do not have state EEOCs, the aggrieved party must file the charge with the federal EEOC within ______ days of the alleged discriminatory act. A.30 B.60 C.90 D.180 E.365

D.180

Under the Consolidated Omnibus Budget Reconciliation Act, an employee has ____ days after coverage would ordinarily terminate to decide whether to maintain it. A.10 B.20 C.30 D.60 E.90

D.60

Which of the following is provided to a plaintiff if the EEOC decides not to sue on behalf of the plaintiff? A.A termination of claim letter B.A reinstatement letter C.A referral letter D.A right-to-sue letter E.A delineation letter

D.A right-to-sue letter

Under ERISA, employers are required to provide to plan participants all of the following except: A.Plan information (i.e., features and funding). B.A grievance and appeals process for participants to get benefits from their plans. C.The right to sue for benefits and breaches of fiduciary duty. D.A yearly outline of anticipated investments. E.Assurances that those in charge of managing plan assets have fiduciary responsibility.

D.A yearly outline of anticipated investments.

A ______ 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. A.General purpose order of authority B.Living legal empowerment C.Notarized order D.Durable power of attorney E.Lasting power of authority

D.Durable power of attorney

Which of the following is not an example of an activity protected by the public policy exception to the employment-at-will doctrine? A.Testifying at hearings for workers' compensation claims. B.Whistle-blowing. C.Serving on jury duty. D.Engaging in charitable activities. E.Doing military service.

D.Engaging in charitable activities.

Which of the following is false regarding intellectual property rights? A.The classification as an employee or independent contractor is also important in determining who owns the output of a work project. B.When an employee completes work at the request of the employer, the product is considered a "work for hire." C.The employer owns the copyright to a work for hire completed by an employee. D.Federal law does not address the issue of when a work is a "work for hire" because such issues are left to state legislatures. E.Only by an agreement of both parties that a specific work is a work for hire may an employer gain copyright ownership of the work of an independent contractor.

D.Federal law does not address the issue of when a work is a "work for hire" because such issues are left to state legislatures.

Which of the following refers to an employer's right, if any, to recover from an employee damages the employer paid a third party as a result of the employee's negligence? A.The right of recompense B.The right of reimbursement C.The entitlement to equity D.The right of indemnification E.There is no such right

D.The right of indemnification

Which of the following is true regarding S corporations? A.They are considered partnerships yet taxed like corporations as long as they follow regulations. B.They cannot have more than 80 shareholders. C.Shareholders do not report profit on their personal income tax forms. D.They may be formed under federal law. E.Income is taxed only when distributed to the shareholders, who must not report the income on their personal income tax forms.

D.They may be formed under federal law.

While making a delivery, Barry, a delivery driver for XYZ Company, went through the drive through at a local restaurant to get a cup of coffee and bumped into the car in front of him doing some damage to the car's bumper. Which of the following is true regarding the liability of XYZ Company for the damage to the car? A.As a matter of law, XYZ Company is not liable because Barry was acting on his own behalf. B.As a matter of law, XYZ Company is not liable because only property damage is involved. C.As a matter of law, XYZ Company is liable because a company is liable for any torts committed by an employee during working hours. D.Whether or not XYZ Company is liable depends on whether Barry's acts are seen as substantial departure from his work. E.Whether or not XYZ Company is liable depends on how long Barry has worked for the company.

D.Whether or not XYZ Company is liable depends on whether Barry's acts are seen as substantial departure from his work.

What is the federal minimum wage? A.$5.85 B.$6.00 C.$6.50 D.$7.00 E.$7.25

E.$7.25

Which of the following is false regarding a sole proprietorship? A.A sole proprietorship requires few legal formalities. B.A sole proprietor has complete control of the management of the business. C.The sole proprietor keeps all the profits from the business. D.Profits are taxed as the personal income of the sole proprietor. E.A sole proprietor is not personally liable for obligations of the business.

E.A sole proprietor is not personally liable for obligations of the business.

Which of the following is true regarding the form of authority upon which an agency relationship may be created? A.Agency relationships can be created through expressed agency, but not through implied authority, apparent agency, or through ratification. B.Agency relationships can be created through expressed agency or through implied authority, but not through apparent agency or through ratification. C.Agency relationships can be created through ratification, but not through implied authority, apparent agency, or expressed authority. D.Agency relationships can be created through ratification or expressed agency, but not through implied authority or apparent agency. E.Agency relationships can be created through expressed agency, implied authority, apparent agency, and ratification.

E.Agency relationships can be created through expressed agency, implied authority, apparent agency, and ratification.

Which of the following is false under federal law regarding employer monitoring of employee telephone calls? A.Employers cannot listen to the private telephone conversations of employees. B.Employers may be subjected to fines of up to $10,000 for violations. C.Employers may ban personal calls during working time. D.To check for compliance, employers may monitor calls so long as they discontinue listening to any conversation once they determine it is personal. E.Employers must give employees access to a telephone and the ability to make personal phone calls at some point during the work day.

E.Employers must give employees access to a telephone and the ability to make personal phone calls at some point during the work day.

Which of the following is false regarding revocation of the authority of an agent and renunciation by an agent? A.At any time a principal can revoke an agent's authority. B.A principal's revocation of an agent's authority may result in a breach of contract entitling the agent to damages. C.An agent can terminate the agency relationship by renouncing the authority given to the agent. D.An agent's wrongful ending of the agency relationship may be a breach of contract entitling the principal to damages. E.If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages.

E.If an agent has breached a fiduciary duty to the principal, the principal can revoke the agent's authority; but the agent may be entitled to damages.

Which of the following is false under the Federal Unemployment Tax Act? A.It was passed in 1935 and created a state system to provide unemployment compensation to qualified employees who lose their jobs. B.Employers must pay taxes to the states which deposit the money into the federal government's Unemployment Insurance Fund. C.Each state has an account from which it can access the money in the federal fund. D.States have different minimum standards for qualifying for unemployment compensation. E.Most states do require employee contributions.

E.Most states do require employee contributions.

Which of the following is not a type of entity that may be covered by Title VII? A.Indian tribes B.Private clubs C.Unions D.Employment agencies E.Private employers with 10 or less employees

E.Private employers with 10 or less employees

Which of the following is not a category of exempt employees under the Fair Labor Standards Act? A.Executives B.Administrative employees C.Professional employees D.Outside salespersons E.Shift workers

E.Shift workers

Michael, a minor, works on his father's farm. His father instructs him to drive to town and to purchase some feed from the Farmers' Coop. Michael charges the feed, as instructed by his father, and returns home. When the feed bill is presented, Dad refuses to pay and alleges that since Michael was a minor when he charged the feed and the feed bill is voidable or void. a) Dad must pay for the feed b) Farms Coop cannot collect the feed bill since Michael was a minor c) Regardless of whether Michael is a minor, he is liable for the feed but his father must reimburse him d) Dad has the right to use his son's minority as a defense against the Farmers' Coop

a) Dad must pay for the feed

Farley Farms, Inc., shipped 100 bales of hops to Burton Brewing Corporation. The agreement specified that the hops were to be of a certain grade. Upon examining the hops, Burton claimed that they were not of that grade. Farley's general sales agent who made the sale to Burton agreed to relieve Burton of liability and to have the hops shipped elsewhere. This was done, and the hops were sold at a price less than Burton was to have paid. Farley refused to accede to the agent's acts and sued Burton for the amount of its loss. Choose the correct statement. a) Farley is bound because its agent expressly, impliedly, or apparently had the authority to make such an adjustment b) Because the hops were sold at a loss in respect to the price Burton had agreed to pay, Burton would be liable for those involved c) Even if Farley's agent had authority to make such an adjustment, it would not be enforceable against Farley unless ratified in writing by Farley. d) Farley will prevail only if the action by its agent was expressly authorized

a) Farley is bound because its agent expressly, impliedly, or apparently had the authority to make such an adjustment

Ben ordered a new desk Office Supply Company for his principal's office. Ben signed the order, "Ben Jones." Select the incorrect statement. a) If Ben exceeded his actual authority, he is liable to his principal b) If Ben exceeded his actual authority, he is liable to the third party c) If Ben acted without apparent authority, but with actual authority, Ben has bound his principal to the contract d) If Ben acted without actual or apparent authority, the third party must elect to hold either Ben or the principal liable.

a) If Ben exceeded his actual authority, he is liable to his principal.

Ellen, a salesperson at Top Tile Company, tells a customer, "Buy your tile here, and I'll install it myself for half of what Top would charge you." The customer makes the purchase based on Ellen's representation. Ellen installs the tile, charges the customer $500, and keeps the money. Ellen has breached the duty of a) loyalty. b) notification. c) obedience. d) none of the above.

a) Loyalty

Assume that Wetzel hired Moe and Curley to paint his barn one time only. Because the roof of the barn is three stories above the ground, Moe decided it would be easier to paint the top of the barn by climbing up a nearby tree and jumping onto the roof. If Moe falls out of the tree and breaks his leg, then Wetzel will be liable for a) Nothing b) Any medical costs incurred by Moe c) Any lost income as well as medical costs incurred by Moe d) None of the above is correct

a) Nothing

Assume that Redbone is authorized agent for Falsetta, a famous opera singer. If Redbone negotiates a deal that provides that Falsetta will sing exclusively in New York at Metropolitan Opera for the next five years, then who, at minimum, must sign the contract on behalf of Falsetta in order for it to be binding? a) Redbone only b) Redbone and Falsetta c) Redbone, Falsetta, and the Metropolitan Opera d) None of the above is correct

a) Redbone only

Koos owns a large furniture store. One afternoon he left it unattended to take care of other business. Slick stopped in to look at furniture, but was mistaken as a sales man by Hoddeson, another prospective customer. Slick shrugged his shoulders and "sold" Hoddeson a chair for $250.00. Slick took Hoddeson's money and disappeared. Hoddeson took the chair home. Hoddeson was sued by Koos for another $250. Hoddeson's best argument would be a) Slick had apparent authority to collect. b) Slick had implied authority to collect. c) Koos was an undisclosed principal. d) Slick was a subagent.

a) Slick had apparent authority to collect.

If Oscar introduces Vinny to his golfing buddies at the local country club as "my business associate", then the fact that an agency relationship is later found by a court to exist between the two after Vinny purport to act as Oscar's agent in completing several business deals with those very same persons, will be due to an application by the court of a) The doctrine of estoppel b) The equal dignity rule c) The Statute of Frauds d) The fiduciary principle

a) The doctrine of estoppel

Before ratification can occur the a) agent must have acted as thought the contract was for the principal. b) Agent must have acted as though the contract was for the agent c) Agent must have been employed under contract with the principal at the time the contract was made d) Principal must sign a written ratification

a) agent must have acted as thought the contract was for the principal.

The Marine Insurance Company hired Janice as a saleslady. She was instructed not to insure any boat over 3 years old unless the insurance was less than $1,500. If a customer wished to insure an older boat for more than $1,500, Janice had to get the prior approval of her boss. Contrary to these instructions, Janice insured David's ten-year-old boat for $10,000. If David's boat is damaged, David a) can recover from Marine Insurance Company since it is stopped from setting up the specific instructions to Janice as a defense unless these instructions were known to David before he contracted with Janice. b) Cannot recover from Marine Insurance Company since he did not inquire about any of Janice's specific instructions c) Cannot recover from Janice since she represents as disclosed principal d) Cannot recover from Marine Insurance Company since Janice exceeded her authority

a) can recover from Marine Insurance Company since it is stopped from setting up the specific instructions to Janice as a defense unless these instructions were known to David before he contracted with Janice.

The term "employment at will" means that a) either party (employer or employee) may terminate the employment relationship at any time and for any reason or not reason, so long as the termination does not violate a statutory law or an employment contract. b) the employer must hire when the will of the employee coincides with the will of the employer. c) the employee may quit his or her job only for cause, and only after consulting with the employer. d) the employer may not fire an employee except for cause, and only after a formal review process.

a) either party (employer or employee) may terminate the employment relationship at any time and for any reason or not reason, so long as the termination does not violate a statutory law or an employment contract.

Easy Corp. is a real estate developer and regularly engages real estate brokers to act on its behalf in acquiring parcels of land. The brokers are authorized to enter into such contracts, but are instructed to do so in their own names without disclosing Easy's identity or relationship to the transaction. If a broker enters into a contract with a seller on Easy's behalf a) the broker will have the same actual authority as if Easy's identity had been disclosed. b) Easy will be bound by the contract because of the broker's apparent authority. c) Easy will not be liable for any negligent acts committed by the broker while acting on Easy's behalf. d) the broker will not be personally bound by the contract because the broker has express authority to act.

a) the broker will have the same actual authority as if Easy's identity had been disclosed.

Title VII of the Civil Rights Act applies to employers who have ______ or more employees for ______ consecutive weeks within one year and who are engaged in a business that affects commerce. a. 15; 20 b. 50; 20 c. 15; 30 d. 20; 50 e. 20; 52

a. 15; 20

Which of the following consists of negotiations between an employer and a group of employees so as to determine the conditions of employment? a. Collective bargaining b. Mediation c. Arbitration d. Collusive dealings e. Mandatory negotiations

a. Collective bargaining

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory? a. Distributorship b. Manufacturing arrangement c. Chain-style business operation d. Approved business franchise e. Acknowledged standards operation

a. Distributorship

Which of the following is the most popular form of business ownership in the U.S.? a. Sole proprietorship b. Limited partnership c. Limited liability partnership d. Corporation e. Limited liability company

a. Sole proprietorship

When a contract exists and a principal agrees to certain conditions, but fails to perform, which of the following would an agent seek in order to attempt to force the principal to perform the contract as stipulated? a. Specific performance b. Specific recoupment c. Adequate performance d. Reformation e. Recognition

a. Specific performance

Which of the following is true regarding criteria needed for creation of the agency relationship? a. The agency must be created for a lawful purpose, and the person hiring an agent must have contractual capacity. b. The agency must be created for an equitable as well as a lawful purpose, and the person hiring an agent must have contractual capacity. c. The agency must be created for a business and lawful purpose, and the person hiring an agent must have contractual capacity. d. The agency must be created for a lawful purpose; and, although there is no requirement that the person hiring an agent have capacity, the person acting as an agent must have contractual capacity. e. The agency must be created for an equitable as well as a lawful purpose; and, although there is no requirement that the person hiring an agent have capacity, the person acting as an agent must have contractual capacity.

a. The agency must be created for a lawful purpose, and the person hiring an agent must have contractual capacity.

Who is considered an eligible employee under the Family and Medical Leave Act? a. Those who have worked at least 25 hours a week for each of 12 months prior to the leave. b. Those who have worked at least 30 hours a week for each of 12 months prior to the leave. c. Those who have worked at least 35 hours a week for each of 12 months prior to the leave. d. Those who have worked at least 40 hours a week for each of 12 months prior to the leave. e. Those who have worked at least 40 hours a week for each of 24 months prior to the leave.

a. Those who have worked at least 25 hours a week for each of 12 months prior to the leave.

Computer Networks, LLC, is a limited liability company. Unless indicated otherwise on Computer Networks' federal tax form, the firm will be taxed as a) A corporation b) A partnership c) A sole proprietorship d) None of the above

b) A partnership

When an agency relationship is wrongfully terminated by the principal a) Actual authority terminates, but implied authority may continue to exist b) Actual authority terminates, buy apparent authority may continue to exist c) Both actual and apparent authority are terminated d) Apparent authority terminates, but implied authority may continue to exist

b) Actual authority terminates, buy apparent authority may continue to exist

Son, a minor, buys Father a lottery ticket (assume that lotteries are not illegal), using Father's money without approval, even though he knows his Father objects to such things, Father's objections to lottery tickets ends when he wins $1,000 a week for life. Which of the following was created what Father cashed in the ticket? a) Agency by agreement b) Agency by ratification c) Agency by estoppel d) Agency by operation of law

b) Agency by ratification

National Computer Corporation (NCC) employs Cynthia as an agent. NCC gives her an exclusive territory in which to sell NCC products. NCC cannot compete with her in that territory under the duty of a) Compensation b) Cooperation c) Indemnification d) Reimbursement

b) Cooperation

Quick Pizza is operated as a partnership. For tax purposes, Quick Pizza a) Is a tax-paying entity b) Is required to file an information return but is not a tax-paying entity c) Pays 1⁄2 of the taxes if there are two partners d) Pays 1⁄4 of the taxes if there are three partners

b) Is required to file an information return but is not a tax-paying entity

Abe is Pat's agent. Pat has instructed Abe to be at all meetings that Pat calls. Abe always comes to these meetings, but he has never been asked to participate in any of these meetings. Abe fails to attend one of these meetings. Pat fires Abe for disobeying his instructions a) Pat is liable for wrongfully terminating Abe. b) Pat was justified in terminating Abe. c) Since Abe had no purpose and gained nothing from the meetings he had a right to miss the meetings. d) Abe would be excused from the meetings only if he was saving Pat expenses, such as for train or cab fares.

b) Pat was justified in terminating Abe.

In the phrase, joint and several liability, the term several means a) Significant b) Separate, or individual c) General d) Severe

b) Separate, or individual

Where the principal is undisclosed a. the third party can sue only the principal once disclosure occurs. b. the agent can require the principal to indemnify the agent if the agent is forced to pay the third party. c. the third party can sue only the agent when disclosure occurs. d. there cannot be an agency.

b) The agent can require the principal to indemnify the agent if the agent is forced to pay the third party

Marie is considering forms of business organization for her law firm. One advantage of the limited liability partnership form is that it allows partners to avoid personal liability for a) Their acts of malpractice b) The malpractice of their partners c) The obligation of the firm beyond the partners' capital contributions d) The obligations of the firm within the limit of partners' capital contributions

b) The malpractice of their partners

Implied authority a) Cannot exist unless there is some express authority in writing b) Usually arises from the position the agent occupies, or customer, or necessity to carry out is express authority of the agent c) Is a doctrine of the common law that has been repudiated by recent cases because of the danger to market place in operation of the doctrine d) Is an emergency power

b) Usually arises from the position the agent occupies, or customer, or necessity to carry out is express

The Medlock Company wrongfully dismissed Kathy from employment. She sued Medlock for damages. Prior to the final judgment in her favor, she was able to earn $10,000 through part-time work. Kathy is entitled to a) the full amount of back pay. b) back pay less $10,000. c) $10,000. d) nothing.

b) back pay less $10,000.

A real estate company may never a) buy real estate listed by one of its principals under any circumstances. b) be liable for breach of a fiduciary duty unless it knowingly acted improperly. c) buy real estate listed with it by a principal if a full disclosure is not made of all relevant facts. d) have legal capacity to unction as an agent.

b) be liable for breach of a fiduciary duty unless it

In cases brought by employees alleging that their privacy has been invaded by e-mail monitoring a) the courts have tended to hold for the employees. b) the courts have tended to hold for the employers. c) the courts have tended to hold for the employers but only if the employees were informed of the monitoring. d) the United States Supreme Court has ruled that the employee's right to privacy has been violated.

b) the courts have tended to hold for the employers.

Suppose that Arnold Agent contracts without authorization on behalf of Peter Principal to have the renowned house painter El Flecko paint both the interior and exterior of Peter's house. Peter is delighted with the idea that one as talented as El Flecko will be painting his house but he wishes to have El Flecko paint on the interior of the house due to El Flecko's extremely high fee. Peter's attempt to ratify that part of the contract relating to the interior of the house will be a) successful. b) unsuccessful, since ratification of a contract must be done in its entirety. c) respondeat superior. d) none of the above is correct.

b) unsuccessful, since ratification of a contract must be done in its entirety.

Which of the following occurs when unionized employees have a labor dispute with their employer and boycott another employer to force it to cease doing business with their employer? a. A primary boycott b. A secondary boycott c. A signal boycott d. A management boycott e. An employee boycott

b. A secondary boycott

Which of the following is the term for the concept that an employee may be fired for no reason at all? a. Fire-at-will b. At-will employment c. No-reason-firing d. Without-reason-firing e. Unsupported discharge

b. At-will employment

In the area of employee testing, which of the following shows a statistical relationship between test scores and objective criteria of job performance? a. Content validity b. Criterion-related validity c. Construct validity d. Object validity e. Performance validity

b. Criterion-related validity

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product? a. Distributorship b. Manufacturing arrangement c. Chain-style business operation d. Approved business franchise e. Acknowledged standards operation

b. Manufacturing arrangement

The doctrine of ______ applies in the context of the principal/employer-agent/employee relationship in relation to liability of the principal/employer for acts of the agent/employee. a. Superior respondeat b. Respondeat superior c. Stare decisis d. Res superior e. Supre superior

b. Respondeat superior

Which of the following occurs when a plaintiff establishes a prima facie case in an action alleging disparate-treatment discrimination in employment in the form of an illegal discharge? a. The plaintiff wins. b. The burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the discharge. c. The burden shifts to the defendant to establish beyond a reasonable doubt that discrimination did not occur. d. The burden remains with the plaintiff to prove discrimination beyond a reasonable doubt, a special standard in disparate-treatment cases. e. The burden remains with the plaintiff to establish damages to a reasonable certainty.

b. The burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the discharge.

Ted's Tavern hired Bruiser as a bouncer. Klem, a customer, insulted Bruiser, who reacted by pushing Klem. Klem sued both Ted and Bruiser for his injuries. Select the correct statement a) Only Bruiser could be liable b) Both Ted and Bruiser could be liable buy only if Bruiser was acting outside the scope of his employment c) Both Ted and Bruiser could be liable buy only if Bruiser was acting within the scope of his employment d) Only Ted could be liable

c) Both Ted and Bruiser could be liable but only if Bruiser was acting within the scope of his employment.

Jones is in the construction business. Jones has been hired to build an office building in a heavily wooded area. Jones hires Barnes Bulldozing to clear the land. The business relationship between Jones and Barnes is a) Principal and agent b) Employer and employee c) Employer and independent contractor d) A partnership

c) Employer and independent contractor

A "person who contracts with another to do something for him (or her) but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking" is a(n) a) Employee b) Agent c) Independent contractor d) None of the above

c) Independent contractor

Suppose that Alex, acting as an agent for Paul, signs an agreement to bind Paul but neglects to tell Paul that the agreement requires the payment of certain taxes to the federal government. If the government later prosecutes Paul for failing to pay the taxes due, Paul will a) Prevail because he was not informed of the tax liability by the agent b) Prevail because he was not given adequate notice c) Not prevail because Alex's knowledge will be imputed to Paul d) Not prevail because paying taxes s mandated by the Constitution

c) Not prevail because Alex's knowledge will be imputed to Paul

Quality Mines, Inc., employs Ron as an agent. Ron enters into a contract with Gems International, Ltd., within the scope of Ron's authority but without disclosing that he is an agent acting for Quality Mines. Quality Mines does not perform. Gems can recover from a) Quality Mines only b) Ron only c) Quality Mines or Ron d) Quality Mines and Ron

c) Quality Mines or Ron

*this one is not on exam don't study it The school band hired Anna, an experienced seller, to sell their cookbooks to raise band money. While Anna has sold a substantial number of books for the band, she has also incurred many airplane and travel expenses. The band terminates Anna. a) The band has caused Anna's apparent authority to cease without further action b) The band could cause Anna's apparent authority to cease without further action c) The band must directly communicate notice of Anna's termination to all third parties known to have dealt with Anna d) No amount of publications will revoke Anna's apparent authority since she traveled all over the country

c) The band must directly communicate notice of Anna's termination to all third parties known to have dealt with Anna*this one is not on exam don't study it

The president of a local company called Appleby into his office and told him that he was being demoted from the position of purchasing agent to clerk effective immediately. One hour later, Appleby was still siting at his same desk when Stu, a supplier, stopped to talk to Appleby. Knowing the company needed certain supplies, Appleby placed an order with Stu just like he had many times before. Stu was unaware of Appleby's demotion. Select the correct statement. a) The company is not liable to pay for the goods b) The company is not liable to pay for the goods since Appleby's actual authority to act on the company's behalf had been terminated. c) The company is liable to accept and pay forth goods since Appleby had apparent authority to act on the company's behalf. d) The company is liable to accept and pay for the goods since Appleby had implied authority to act on the company's behalf.

c) The company is liable to accept and pay forth goods since Appleby had apparent authority to act on the company's behalf.

The requirement that an agency agreement must be evidence by a writing whenever the subject matter of any contract procured by the agent is required to be in writing is known as a) The mirror image rule b) The Statute of Frauds c) The equal dignity rule d) The doctrine of worthier title

c) The equal dignity rule

Tom, a third party, knows Abe is an agent, but Tom does not know the identity of Abe's principal. The principal for whom Abe acts is a) an undisclosed principal b) a non-existing principal c) a partially disclosed principal d) a disclosed principal

c) a partially disclosed principal

Limited partners a) are personally responsible for the debts of the business. b) control operations of the limited partnership. c) may assign their interest in a business to another person without dissolving the limited partnership. d) are all of the above.

c) may assign their interest in a business to another person without dissolving the limited partnership.

Workers' compensation laws are a) Federal statutory law b) Common law c) State statutory law d) International law

c) state statutory law.

Assume that Mike hires Candy, a real estate broker, to sell his house. If the house burns down before being sold, then a) Candy will continue to act as Mike's agent until after the house is rebuilt and sold. b) Candy will continue to act as Mike's agent until after the house is rebuilt only if he gives additional consideration. c) the agency relationship will be terminated. d) none of the above is correct.

c) the agency relationship will be terminated.

Which of the following is true regarding whether an employer may be held liable under Title VII for sexual harassment of an employee by a nonemployee? a. An employer cannot be held liable in such cases because the employer has no control over the nonemployee. b. An employer is liable as a matter of law in such cases because an employer has an absolute duty to provide a work environment that is free of harassment. c. An employer may be held liable in such cases if the employer knows that a customer repeatedly harasses an employee, yet the employer does nothing to remedy the situation. d. An employer may only be held liable in such cases if quid pro quo harassment is involved. e. An employer may only be held liable in such cases if disparate-impact harassment is involved.

c. An employer may be held liable in such cases if the employer knows that a customer repeatedly harasses an employee, yet the employer does nothing to remedy the situation.

A ______ trust is an equitable trust imposed on one who wrongfully obtains or holds legal right to property he or she should not possess. a. Resolute b. Actual c. Constructive d. Defined e. Absolute

c. Constructive

Which of the following is false regarding implied agency and apparent agency? a. An implied agency as well as an apparent agency may be created by conduct. b. Circumstances may determine the extent of implied agency. c. Implied agency may conflict with express authority. d. Apparent agency is also known as agency by estoppel. e. If a principal in an alleged apparent agency situation denies that an agency existed, the third party alleging agency must demonstrate that he or she reasonably believed, based on the principal's conduct, that an agency relationship existed.

c. Implied agency may conflict with express authority.

Which of the following is responsible for running the day-to-day business of a corporation? a. Investors b. Shareholders c. Officers d. Administrators e. Members of the board of directors

c. Officers

A person who decides to go into business on his or her own without further formality forms a[n] _____. a. Individual entity b. Sole proprietorship c. Single entity d. Sole entrepreneurship e. Single entrepreneurship

c. Single entity

Which of the following is true regarding the rights of an employer who is held liable and pays a third party, not because of the employer's negligence, but under the doctrine of respondeat superior based upon negligence of an employee? a. The employer has no right to receive any reimbursement from the negligent employee. b. The employer has a right to recover only 50% of any amounts paid from a negligent employee. c. The employer has a right to recover all amounts paid from the negligent employee. d. The employer can recover all amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute. e. The employer can recover 50% of any amounts paid from a negligent employee but only if it can be shown that the employee's negligence was based upon the violation of a statute.

c. The employer has a right to recover all amounts paid from the negligent employee.

When an agent acts under emergency authority, courts recognize the agents' act as a) Agency by agreement b) Agency by ratification c) Agency by estoppel d) Agency by operation of law

d) Agency by operation of law

Melanie, a waitress, is harassed by her boss, her coworkers, and even by customers. For which of these incidents may her employer be held liable? a) The boss' harassment. b) The coworkers' harassment c) The customers' harassment d) All of the above

d) All of the above

Apparent authority a) Depends upon what a third party is reasonable in believing b) Cannot be created by statement of the agent alone c) May be limited by an express statement of limitation of authority if known to the third party d) All of the above answers are correct

d) All of the above answers are correct

Kim, Lyn, and Mike agree to be partners in Northwest Tours, a travel agency. Kim contributes 75 percent of the capital. The partners agree to split the profits equally. When Northwest is dissolved, its liabilities are greater than its assets. The losses are paid by a) Kim because he contributed most of the capital b) Lynn and Mike because they contributed the lease of the capital c) All of the partners in proportion to their capital contributions d) All of the partners in proportion to their shares of the profits

d) All of the partners in proportion to their shares of the profits

Ratification by the principal of an act committed by his agent a) Is binding even if the principal is undisclosed b) Is binding even though the principal acts without full knowledge of material facts. c) Is only effective if both the principal and agent were capable of contracting at the time the agent acted d) Does not cure the defect of lack of authority

d) Does not cure the defect of lack of authority

When someone is a whistleblower, what does he do? a) He monitors environmental progress on federal projects. b) He consults union organizers in elections. c) He tells government officials when union officers act abusively. d) He tells government officials, upper management, or the press that his employer is engaged in an unsafe or illegal activity.

d) He tells government officials, upper management, or the press that his employer is engaged in an unsafe or illegal activity.

Jim agreed to sell cars for Bill for a two-year period beginning January 2, 1986. During February 1987, Jim decided he would no longer wished to work for Bill, so he quit. Select the correct statement. a) Jim had the right to terminate the employment contract b) Jim had the power to terminate this employment contract without liability for damages c) Bill can specifically enforce this employment contract and force him to return to work d) Jim lacks the right, but has the power, to terminate this employment contract

d) Jim lacks the right, but has the power, to terminate this employment contract

Starr is an agent of a disclosed principal, Maple. On May 1, Starr entered into an agreement with King Corp. on behalf of Maple that exceeded Starr's authority as Maple's agent. On May 5, King learned of Starr's lack of authority and immediately notified Maple and Starr that it was withdrawing from the May 1 agreement. On May 7, Maple ratified the May 1 agreement in its entirety. If King refuses to honor the agreement and Maple brings an action for breach of contract, Maple will a) Lose. The May 1 agreement is void due to Starr's lack of authority b) Prevail. The agreement of May 1 was ratified in its entirety c) Prevail. Maple's capacity as a principal was known to Starr d) Lose. King notified Starr and Maple of its withdrawal prior to Maple's ratification.

d) Lose. King notified Starr and Maple of its withdrawal prior to Maple's ratification.

Riche, a well-known millionaire, hired Ball to buy an autograph of President George Washington from Carey, an autograph dealer. Riche instructed Ball to purchase the autograph in Ball's name from Carey at the price not to exceed $5,000. Ball entered into such a contract for $4,500 in his own name. Before the contract was performed, Carey discovered Riche's identity and refused to perform, hoping to obtain a higher price from Riche. Select the more correct answer. a) Carey may disaffirm the contract with Ball provided he does so immediately after discovering Riche's identity. b) After Riche's identity becomes known to Carey, Ball's liability on the contract terminates. c) Ball's apparent authority usually will be greater if he acts for an undisclosed principal rather than a disclosed principal. d) Riche may enforce the contract made by Ball and Carey even though his name does not appear in the contract.

d) Riche may enforce the contract made by Ball and Carey even though his name does not appear in the contract.

According to a recent survey by the American Management Association, more than ________ of employers engage in some form of surveillance of their employees a) One-fourth b) One-third c) One-half d) Two-thirds

d) Two-thirds

At what age does protection against age discrimination arise under the Age Discrimination in Employment Act? a. 60 b. 50 c. 45 d. 40 e. 35

d. 40

Which of the following is another name for apparent agency? a. Simplified agency b. Equitable agency c. Agency by law d. Agency by estoppel e. Approved agency

d. Agency by estoppel

Which of the following is the most typical way in which to provide constructive notice of agency termination? a. By telephone b. By letter c. By posting a notice at the courthouse d. By newspaper publication e. By e-mail

d. By newspaper publication

Which of the following is false regarding agency law in the United Arab Emirates (UAE)? a. UAE Commercial Transaction Law is relevant in regard to agents. b. The UAE Civil Code is relevant in regard to agents. c. Registered agents may seek compensation when an agency ends even if the termination occurs in accordance with the terms of the agency agreement. d. Only registered agents are entitled to seek compensation in the event of termination. e. In regard to disputes about compensation of agents, court-appointed experts are usually the entities that are responsible for determining compensation amounts.

d. Only registered agents are entitled to seek compensation in the event of termination.

Which of the following is not one of the criteria listed in the text as indicative of whether a worker is an employee or an independent contractor? a. Whether the worker is engaged in a distinct occupation or an independently established business. b. The employer supplying the tools. c. How the worker is paid. d. The amount of time the worker has been involved in the trade or area at issue. e. The length of time for which the worker is employed.

d. The amount of time the worker has been involved in the trade or area at issue.

Which of the following is not a reason for which leave may be requested under the Family and Medical Leave Act? a. The care of a seriously ill parent. b. The birth of a child. c. The adoption of a child. d. The need for fertility treatments in order to conceive. e. The placement of a foster child in the employee's care.

d. The need for fertility treatments in order to conceive.

Which of the following is true under the UCC regarding liability of a principal if the agent enters into a contract that is a negotiable instrument? a. The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability. b. The principal cannot be held liable unless the principal's name is on the instrument. c. The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity. d. The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity. e. The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity, or the agent has been ruled insolvent.

d. The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity.

Which of the following refers to an employer's right, if any, to recover from an employee damages the employer paid a third party as a result of the employee's negligence? a. The right of recompense b. The right of reimbursement c. The entitlement to equity d. The right of indemnification e. There is no such right

d. The right of indemnification

Which of the following is responsible for managing the business of a corporation? a) Investors b) Shareholders c) Officers d) Administrators e) Members of the board of directors

e) Members of the board of directors

Which of the following would likely be formed by farmers who want to pool certain crops together to ensure that they get a high market price for their crops? a. A business trust b. A syndicate c. A joint venture d. A joint stock company e. A cooperative

e. A cooperative

Which of the following is true regarding an award of attorney fees under Title VII? a. Attorney fees are always awarded to the prevailing party in Title VII cases. b. Similar to attorney fees in a motor vehicle accident lawsuit, attorney fees are never awarded to the prevailing party in Title VII cases. c. Attorney fees may be awarded to a successful plaintiff in a Title VII case and are typically denied only when special circumstances would render the award unjust, but attorney fees are not awarded to prevailing defendant. d. Attorney fees are not awarded to prevailing plaintiff; but if it is determined that a plaintiff's action was frivolous, unreasonable, or without foundation, the courts may award attorney fees to the prevailing defendant. e. Attorney fees may be awarded to a successful plaintiff in a Title VII case and are typically denied only when special circumstances would render the award unjust; and if it is determined that a plaintiff's action was frivolous, unreasonable, or without foundation, the courts may award attorney fees to the prevailing defendant.

e. Attorney fees may be awarded to a successful plaintiff in a Title VII case and are typically denied only when special circumstances would render the award unjust; and if it is determined that a plaintiff's action was frivolous, unreasonable, or without foundation, the courts may award attorney fees to the prevailing defendant.

Which of the following is the term used to describe the duty an agent has to follow the lawful instruction and direction of the principal? a. Duty of action b. Duty of contract c. Express duty of action d. Duty of performance e. Duty of obedience

e. Duty of obedience

Which of the following is true regarding corporations? a. A corporation is not a separate legal entity. b. A corporation may not be sued. c. A corporation is created according to federal law. d. Shareholders may typically be held liable for debts of the corporation. e. The corporation must pay taxes on profits, and shareholders must pay taxes on dividends they receive from the corporation.

e. The corporation must pay taxes on profits, and shareholders must pay taxes on dividends they receive from the corporation.

Which of the following is true if an agent has no authority to act on behalf of a principal, but the agent still enters into a contract with a third party? a. The principal is bound only if the principal is a disclosed principal. b. The principal is bound only if the principal is an unidentified principal. c. The principal is bound only if the principal is a partially disclosed principal. d. The principal is bound unless the principal can establish clearly and convincingly that the agent was expressly barred from engaging in the conduct at issue. e. The principal is not bound unless the principal ratifies the agreement.

e. The principal is not bound unless the principal ratifies the agreement.

How long does an agent's apparent authority continue once an agency relationship is terminated? a. It ends immediately b. 24 hours c. 7 days d. 30 days e. Until the principal notifies third parties that the agency relationship has ended.

e. Until the principal notifies third parties that the agency relationship has ended.