Acct 340 Chpater 29 quiz

Which of the following is NOT true regarding powers of​ attorney?

A power of attorney is one of the most formal types of express agency agreements.????????

An owner of a vacant lot enters into an agency agreement with a real estate agent to sell the lot for​ $1 million based on the​ agent's market analysis. After signing the​ agreement, the agent learns that oil has been discovered on the​ property, a discovery that makes the land worth​ $5 million. Which of the following is​ true?

The agency may be terminated because of this change in circumstances.

Which of the following is NOT true about an​ agent's duties?

The duty to account​ (sometimes called the duty of​ accountability) includes keeping records of all property and money received and expended during the course of the agency.??????????

Which of the following is an INCORRECT statement regarding express​ agencies?

Without​ exception, express agency contracts must be in writing to be enforceable.

An apparent agency is also known as an agency by​ _____.

estoppel

Section​ 1(1) of the Restatement​ (Second) of Agency defines agency as​ a(n) _____ relationship ​"which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control.​"

fiduciary

With a​ _____ power of​ attorney, a principal confers broad powers on the agent to act in any matters on the​ principal's behalf.

general

A general medical practitioner in a rural area would be held to the standard of a reasonable​ ________. A brain surgeon would be held to the standard of a reasonable​ ________.

general practitioner in rural​ areas; brain surgeon

In many​ situations, a principal and an agent do not expressly create an agency.​ Instead, the agency is inferred from the conduct of the parties. This type of agency is referred to as​ a(n) _____ agency.

implied

An agency terminates by​ _____ of performance because a situation arises that makes the fulfillment of the agency impossible.

impossibility

Which of the following is a duty an agent owes to a​ principal?

performance

A party who employs another person to act on his or her behalf is called​ a(n) _____.

principal

An agency can be legally terminated in all EXCEPT which of the following​ ways?

ratification of the contract by the principal

With​ a(n) _____ power of​ attorney, a principal confers powers on an agent to act in specified matters on the​ principal's behalf.

special

Olivia signs a document giving her sister the authority to act on her behalf while she undergoes surgery. This is known as​ a(n) _____.

special power of attorney

Olivia signs a document giving her sister the authority to sign any documents necessary to list her house for sale while she is on vacation. This is known as​ a(n) _____.

special power of attorney

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

subrogation

An agency is terminated by operation of law in which of the following​ circumstances?

the bankruptcy of the principal

An agency is terminated by operation of law in which of the following​ circumstances?

the death of the principal

Which of the following circumstances can lead to termination of an agency by impossibility of​ performance?

the loss of a required qualification

Which of the following circumstances can lead to termination of an agency by impossibility of​ performance?

the loss or destruction of the subject matter of the agency

Whose actions create an apparent​ agency?

the​ principal's

Which of the following is an INCORRECT statement regarding the creation of an agency​ relationship?

​Generally, minors can appoint agents.

Which of the following is NOT true about an​ agent's duties?

An agent who does not perform his or her express duties or who fails to use the standard degree of​ care, skill, or diligence is liable to the principal for damages.????????????

Which of the following is an INCORRECT statement regarding independent​ contractors?

As a general​ rule, employees are independent contractors.

Marty Levine sees a house for sale and thinks his friend Linda Maxwell would want to buy it. Marty enters into a contract to purchase the house from the seller and signs the contract​ "Marty Levine, agent for Linda​ Maxwell." Which of the following is NOT​ true?

Because Marty is now Linda​ Maxwell's agent, Linda is bound to the contract.

​_____ agency is the most common form of agency.

Express

Which of the following is an INCORRECT statement regarding an agency by​ ratification?

For an agency by ratification to​ occur, an​ employer-employee relationship must exist between the principal and the agent.

An​ employer-employee relationship exists when an employer hires an employee to perform some form of physical service but does not give that person​ _____ authority to enter into contracts.

agency

A party who agrees to act on behalf of another is called​ a(n) _____.

agent

A​ principal-_____ relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

agent

​Siri, who is driving her​ automobile, is injured when another driver negligently causes an automobile accident. Siri hires a lawyer to represent her on a 35 percent​ contingency-fee basis. If the lawyer wins the case for Siri or settles the case with​ Siri's approval, he will earn 35 percent of whatever is collected from the defendant. If the lawyer does not win or settle the​ lawsuit, he gets paid nothing. The agent can recover this amount from the principal because of the duty to​ _______.

compensate

Notice that an agency has terminated that has been placed in the newspaper is an example of​ ___________.

constructive notice

​Saachi, who owns a piece of vacant real​ estate, hires​ Maaksharth, a licensed real estate​ broker, to list the property for sale.​ Ian, an adjacent property owner to​ Saachi's property, tells the agent that a chemical plant has polluted his property and probably​ Saachi's property. The owner is unaware of any pollution and the agent does not tell her. If Saachi sells the property to Mabina and it is later discovered that the property Mabina bought from Saachi is​ polluted, would Saachi be​ liable?

​Yes, the​ agent's knowledge is imputed to Saachi????????

Principals often employ outsiders—that ​is, persons and businesses that are not ​_____—to perform certain tasks on their behalf. These persons and businesses are called​ _____.

​employees; independent contractors

A power of attorney is an​ _____ agency agreement that is often used to give​ a(n) _____ the power to sign legal documents on behalf of the​ _____.

​express; agent; principal