The Legal Environment Of Business Ch 6-11
voidable contract
A(n) _____ is best defined as a contract that one party may, at its option, either disaffirm or enforce. Multiple Choice unenforceable contract voidable contract valid contract quasi-contract
express contract
A(n) _____ is created when the parties involved have knowingly and intentionally agreed on the promises and performances. Multiple Choice quasi-contract void contract express contract implied contract
principal Explanation A principal is in control of an agency relationship. The control need not be total or continuous and need not extend to the way the agent performs, but there must be some sense that the principal is defining the tasks and objectives of the agency relationship.
A(n) _____ is in control of an agency relationship because he or she defines the tasks and objectives of the relationship. Multiple Choice agent principal independent contractor third party
duress
If one party to a contract uses any form of unfair coercion to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of _____. Multiple Choice concealment detrimental reliance fraudulent misrepresentation duress
the innocent party relied on the misrepresentation.
In cases of fraudulent misrepresentation, the law is most likely to allow the innocent party to recover when Multiple Choice the tortfeasor is unaware that the material fact is false. the parties did not suffer any damage. the misrepresentation of the fact is immaterial. the innocent party relied on the misrepresentation.
provable as false.
In order to qualify as defamatory, a statement made by a defendant about a plaintiff must be Multiple Choice stated without an intention to harm. true and based on actual facts. merely unkind. provable as false.
When the expenses incurred by Sarah result from payments made by her for Aaron's benefit, for which she mistakenly assumes that she had the authority. Explanation Aaron has a duty to reimburse Sarah when the expenses incurred by Sarah result from payments made by her for Aaron's benefit, for which she mistakenly assumes that she had the authority. A principal has a duty to reimburse the agent when the expenses incurred by the agent are done for the principal's benefit without actual authority, as long as the agent acted under a mistaken good faith belief that he had the authority.
In which of the following cases does Aaron, a principal, have a duty to reimburse Sarah, an agent? Multiple Choice When the expenses incurred by Sarah result from payments made by her for Aaron's benefit, for which she mistakenly assumes that she had the authority. When the expenses incurred by Sarah are outside her actual authority. When the expenses incurred by Sarah are due to losses resulting from her intentional torts or illegal acts, which are outside her actual authority. When the expenses incurred by Sarah are due to the losses resulting from her negligence.
the seller has exercised all possible care in preparation and sale of the product.
Liability for a defective product can be triggered even when Multiple Choice the seller has exercised all possible care in preparation and sale of the product. the injured party can prove that the product was not received at all. the product is not expected to reach the user without a substantial change in its condition. the seller is not engaged in the business of selling such a product.
Capacity to contract.
Linda has signed a two-year-long contract with HNS Inc., a clothing retail store, to work as a sales trainee. Linda's parents are outraged because Linda is not yet 18 years of age. In this scenario, which of the following elements of the contract between Linda and HNS Inc. has most likely been missed? Multiple Choice Legal purpose of the contract. Consideration. Mutual assent. Capacity to contract.
duty of loyalty Explanation The duty of loyalty is the centerpiece of fiduciary obligation. The law requires that the agent hold the principal's objectives paramount. Unless the principal has knowingly agreed to the contrary or extraordinary circumstances exist, the agent is obliged to advance the principal's interest over her own interests.
The _____ is the centerpiece of a fiduciary relationship between an agent and a principal because the agent is obliged to advance the principal's interest over her own interest. Multiple Choice duty to act with due care duty for disclosure duty to obey duty of loyalty
pointing to facts that infer negligent conduct without a showing of exactly how the tortfeasor behaved.
The doctrine of res ipsa loquitur is concerned with Multiple Choice establishing that the injured party in a strict product liability case had already assumed the risk. defending against defamation claims by using the right of absolute privilege. pointing to facts that infer negligent conduct without a showing of exactly how the tortfeasor behaved. using international norms as the basis for judging transactions that involve two countries.
battery
The intentional touching of another person, without that person's consent, in a harmful or offensive manner is called _____. Multiple Choice battery civil assault arson voyeurism
discharge
The parties to a contract agree on terms and perform the contractual obligations in good faith in order to complete the contract. This completion is known as _____. Multiple Choice discharge repudiation remedy rescission
health coverage benefits Explanation COBRA mandates that employers provide continuous health care coverage to employees terminated, even if terminated for cause. The COBRA requires that the employer provide exactly the same health coverage for up to 18 months.
The primary purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA) is to ensure a terminated employee's access to _____. Multiple Choice overtime benefits life insurance benefits flex-time benefits health coverage benefits
express, bilateral contract
Todd offers to shovel the snow off Maria's patio for $25. Maria agrees verbally and shakes Todd's hand to sign off on the agreement. When Todd has completed the shoveling job, Maria pays him the $25. This scenario best illustrates a(n) _____. Multiple Choice implied, unilateral contract express, bilateral contract express, unilateral contract implied, bilateral contract
perfect tender rule
Under the Uniform Commercial Code (UCC), a seller's obligation actually goes beyond just delivering conforming goods. The seller must deliver the goods in a manner that matches the contract terms in every respect. This is known as the _____. Multiple Choice mirror image rule perfect tender rule seasonable notice rule knockout rule
output contract
Vino Tinto Inc. sells a variety of wines but specializes in selling premium red wine. If the company enters into an agreement with a winery in Spain to purchase all the red wine the winery produces, this would be a(n) _____. Multiple Choice closed-term contract input contract requirements contract output contract
cover
When a seller breaches a sales contract, the Uniform Commercial Code (UCC) provides the buyer with an option to take immediate steps by canceling the contract and purchasing substitute goods from another vendor in order to continue business operations. This right is known as _____. Multiple Choice knockout cure tender cover
impossibility
When performance of an obligation has become illegal subsequent to the contract but prior to performance, the contract will most likely be terminated on the basis of _____. Multiple Choice frustration of purpose impossibility subjectivity condition precedent
reformation
When two parties have imperfectly expressed their agreement and this imperfection results in a dispute, a court may change the contract by rewriting it to conform to the parties' actual intentions. This contract modification is called _____. Multiple Choice reformation injunction mitigation tender of performance
Alan drives his car at 60 mph in a 35 mph zone because he does not see the speed limit sign.
Which of the following acts would be considered negligence per se? Multiple Choice Talia forgets to warn her guests that the cream used in the dessert is not fat-free. Alan drives his car at 60 mph in a 35 mph zone because he does not see the speed limit sign. Nate gets an aggressive dog because he wants his home guarded. Rita fails to notify the school administrator that the stairway in her school library is broken.
Mutual assent
Which of the following elements of a contract pertains to the fact that there is an offer and agreement between the involved parties? Multiple Choice Capacity to contract Consideration Legal purpose Mutual assent
The value of goods versus the value of services.
Which of the following factors will a court most likely examine to determine the source of law governing a hybrid contract? Multiple Choice The state in which the contract is signed. The value of goods versus the value of services. The legal purpose of the contract. The number of parties involved in the contract.
Vicky, a criminal attorney, who makes a statement about an accused during a trial.
Which of the following individuals is most likely to avoid liability for defamation through absolute privilege? Multiple Choice Vicky, a criminal attorney, who makes a statement about an accused during a trial. Chloe, a media person, who quotes an actor and calls him a chauvinist. Mel, a journalist, who makes a debasing statement about a CEO of a multinational company. Jade, an environmentalist, who makes a statement based on an official public document.
A non-government official who relies on and cites an official public document while making an allegation.
Which of the following individuals is protected against defamation claims through a qualified privilege? Multiple Choice A member of Congress who makes a criticizing statement during a congressional hearing while in office. A state legislator who makes an allegation in the course of carrying out her duties. A prosecutor who makes a statement against an accused during a court proceeding. A non-government official who relies on and cites an official public document while making an allegation.
Both do not require an offer to have complete terms in order to be valid.
Which of the following is a similarity between the Uniform Commercial Code (UCC) and the U.N. Convention on Contracts for the International Sale of Goods (CISG)? Multiple Choice Both allow sellers the right to cure even after the performance period is over. Both do not require an offer to have complete terms in order to be valid. Both include a statute of frauds. Both do not apply to nonmerchants.
A bunch of employees engage in picketing at their employer's facility. Explanation Wildcat strikes, sit-in strikes, strikes during a cooling-off period, and secondary boycotts are considered illegal work stoppages. Strikers have the right to engage in picketing at the employer's facilities, although there is no right to picket at the actual property site owned by the company.
Which of the following is most likely to be considered a legal strike? Multiple Choice A crowd of union members engage in a wildcat strike to slow down work. A group of employees engage in a secondary boycott. A group of union members strike during the cooling-off period. A bunch of employees engage in picketing at their employer's facility.
A contract that violates a public policy.
Which of the following is most likely to be considered void automatically? Multiple Choice A contract that promises legal detriment to the promisee. A contract that is made by a minor. A contract that violates a public policy. A contract that is made by an incompetent.
Airline employees Explanation In general, the NLRA covers all employers whose business activity involves some aspect of interstate commerce. Some workers are specifically exempted by statute, including railroad and airline employees. The NLRA provides general protections for the rights of workers to organize, engage in collective bargaining, and use economic weapons (such as a strike) in the collective bargaining process.
Which of the following is specifically exempted from coverage by the National Labor Relations Act (NLRA)? Multiple Choice Teachers Airline employees Courier agents Insurance agents
The nonbreaching party under the contract may not be relieved from performing his duties.
Which of the following is true of a contract that involves a partial breach by one of the parties? Multiple Choice The nonbreaching party under the contract may not be relieved from performing his duties. The breach has an effect on the value of the contract. The breach relates to a fundamental term of the contract. The nonbreaching party under the contract may not recover damages related to the breach.
Not sure
Which of the following is true of contracts with minors? Multiple Choice If a minor enters into a contract, it is declared to be automatically void. A minor may force the concerned adult to complete the contract. If a minor enters into a contract, it is automatically enforceable. A minor may not avoid a contract before she reaches the age of majority.
Warranty laws impose liability even in the absence of negligence.
Which of the following is true of product liability? Retailers do not share the duty to warn consumers of the dangers a product may cause. Warranty laws impose liability even in the absence of negligence. If a seller has not made a specific representation about the product, the buyer is not protected by warranty. Only those who are in a direct purchase agreement can sue for negligence.
common law
If a hybrid contract is predominantly for services, and the goods are incidental, then the contract is governed by _____. Multiple Choice federal law common law tort law statutory law
obtaining authorization cards Explanation If an employer has not already recognized a union, and a group of employees decide that they wish to form a collective bargaining unit to deal with labor-management matters such as negotiating a contract, the NLRA sets out a procedure for forming a union. The first step is to organize an effort to have workers sign authorization cards indicating their wish to form a local union and/or join an existing union.
According to the procedure set by the National Labor Relations Act (NLRA), the earliest step in the process of setting up a labor union is _____. Multiple Choice taking reform efforts holding an election obtaining authorization cards obtaining certification
Ace Corp. will bear the risk of loss until the goods are delivered to Red Source.
Ace Corp., a company based in New York, uses the delivery services of Red Source Inc. to ship machinery to a customer located in Boston. If the contract is a normal shipment contract, Multiple Choice Ace Corp. will bear the risk of loss until the goods are delivered to Red Source. the customer will be liable to Red Source for any damages during the transit. the customer will be liable to Ace Corp. for any damages during the transit. Ace Corp. will bear the risk of loss till the goods reach the customer.
intermingling the principal's funds or property with the agent's own accounts or possessions. Explanation Unless the parties agree otherwise, the agent must keep appropriate written records for any money that the agent spends or receives in the course of the agent's representation. Known as the duty to account, this includes keeping records on data such as reimbursable expenses, checks or cash received on behalf of the principal, and any liabilities incurred in the course of the agent's conduct. The duty to account includes a prohibition against intermingling the principal's funds (or property) with the agent's own funds or possessions.
An agent's duty of accounting includes all of the following except Multiple Choice maintaining records of reimbursable expenses. keeping track of liabilities incurred on behalf of the principal. intermingling the principal's funds or property with the agent's own accounts or possessions. maintaining written records of any money spent or received on behalf of the principal.
the damages are a result of the breach of the contract.
An aggrieved party is entitled to recover consequential damages when Multiple Choice the losses are due to factors within the content of the contract. the damages are caused by unforeseeable factors. the losses are covered by compensatory damages. the damages are a result of the breach of the contract.
wildcat strike Explanation This is an example of a wildcat strike, which occurs when individual union members or small groups of union members go on strike for short bursts of time without union authorization. Wildcat strikes are illegal, but sometimes the form of a wildcat strike is subtle, as occurs when a group of employees simultaneously use sick time to perpetrate a work stoppage or slowdown.
Anna works at Zeal-Us Inc. She and her coworkers have been going on strike for two hours every alternate day in protest against the unfair termination of one of their colleagues. However, they have not been authorized to do so by their union. This is an example of a _____. Multiple Choice sit-in strike secondary boycott legal strike wildcat strike
guilty knowledge
Based on the fact that Josh's bike is less than a year old, has recently been serviced, and is perfect for mountain riding, Rick agrees to buy the bike and signs Josh's contract. However, Josh is aware that, in reality, his bike is much more than a year old. In this scenario, Josh's behavior is reflective of _____. Multiple Choice innocent misrepresentation promissory estoppel unconscionability guilty knowledge
the Court is likely to find that this is a unilateral mistake. However, since Builders knew (or should have known) that there was a mistake, the supplier will not be held to the $3,000 quote.
Builders Inc., an experienced contractor, requested a bid from a supplier for lumber needed to complete a project. When responding to the bid, the supplier made a clerical error, and offered $30,000 worth of lumber for $3,000. Builders sent an e-mail accepting the offer. If this situation turns into a legal dispute, Multiple Choice the Court is likely to find that this is a unilateral mistake. However, since Builders knew (or should have known) that there was a mistake, the supplier will not be held to the $3,000 quote. the Court will find there is no valid contract because the $3,000 is not sufficient consideration for $30,000 worth of lumber. This is a mutual unilateral mistake. the Court will enforce the agreement. The supplier should have been more careful in responding to the bid. This is a bilateral mistake. the Court is likely to find that this is a mutual mistake; both parties are wrong. The Court will order the parties to negotiate a fair deal.
ConElectric is liable to the suppliers for Paul's actions because it did not notify the suppliers about his termination. Explanation ConElectric Inc. is liable to the suppliers for Paul's actions after termination of the contract because the suppliers were not notified. ConElectric is not held liable if it notified the suppliers about the termination of Paul's contract. Failing to properly notify appropriate parties of the termination of an agency relationship may result in continued liability of the principal for acts of the agent despite the termination.
ConElectric Inc. is a consumer electronics company. Paul is a procurement officer who acts as an agent for ConElectric to procure components from suppliers. ConElectric has recently terminated Paul's contract but has not informed the suppliers. Paul pretends to still be working for ConElectric, collects the components from the suppliers, and absconds without paying. In the context of termination of the agency relationship, which of the following statements is most likely to be true? Multiple Choice ConElectric is liable to the suppliers for Paul's actions because it did not notify the suppliers about his termination. ConElectric is liable to the suppliers for Paul's actions even after termination of the contract, regardless of whether it notified the suppliers or not. ConElectric is not liable for Paul's actions under any circumstances, as Paul was just an agent. ConElectric is not liable to the suppliers for Paul's actions, as it is the suppliers' duty to do a background check.
A specific performance
Dev agrees to sell Walter a house in 60 days. At the planned time, Dev breaches the agreement by refusing to sell the house. Because Walter wanted the particular house for its personal significance, he cannot be compensated with another house. In this case, the court will most likely require Dev to sell Walter the house as promised. Which type of equitable remedy is indicated in this scenario? Multiple Choice A specific performance A nonequitable remedy Restitution Reformation
three months
Generally, with respect to a merchant's firm offer, the Uniform Commercial Code (UCC) provides that the offer can be irrevocable for a maximum period of _____. Multiple Choice 18 months one year 15 days three months
If Maya recovers the full value of the contract from Kevin, she cannot resell the goods even if a new buyer is found.
Maya enters into a sales contract with Kevin. Which of the following is most likely to be true if Kevin breaches the contract even before he receives the goods? Multiple Choice If the breach occurs while the goods are in transit to Kevin, Maya cannot cancel the contract outright. If Maya incurs incidental damages due to reselling the goods, she cannot claim any difference in value between the contract price and resale price. If Maya recovers the full value of the contract from Kevin, she cannot resell the goods even if a new buyer is found. If the goods are perishable, commercial standards and state law may require a public auction advertised over a period of time.
Mike is bound to honor the contract because he did not ratify or repudiate it but reaped its benefits. Explanation In this scenario, Mike is bound to honor the contract because he did not ratify or repudiate it but reaped its benefits. Actual authority arises either when the authority is implied based on custom or course of past dealings or when the parties expressly agree to create an agency relationship. Creation of an agency relationship typically involves the agent's power to bind the principal to third parties (and third parties to the principal) in an agreement of some type.
Mike hires Tom, a general contractor, to renovate his apartment while he is away on vacation. Mike expects Tom to have completed the work by the time he gets back in three weeks. Tom's team needs asphalt roof shingles to install a new roof but Tom does not have a regular supplier. Assuming he has the authority in Mike's absence, Tom signs a sales contract on behalf of Mike to obtain the shingles from a third party. The contract allows Mike to make the payment for the shingles over the course of the next three months. When Mike returns, Tom informs him about this contract. Mike neither ratifies nor repudiates the contract. Based on this scenario, which of the following statements is most likely to be true? Multiple Choice Mike is not bound to honor the contract because he did not expressly ratify the contract. Mike and Tom are bound to honor the contract because they are in a fully disclosed agency relationship. Mike is bound to honor the contract because he did not ratify or repudiate it but reaped its benefits. Mike is not bound to honor the contract because he did not authorize Tom to sign a contract on his behalf.
expiration Explanation More often than not, the parties in an agency relationship agree to a fixed term for the representation. In that case, the agency relationship may be terminated by expiration.
More often than not, the parties in an agency relationship agree to a fixed term for the representation. In that case, the agency relationship may be terminated by _____. Multiple Choice expiration destruction operation of law continued liability
injunctive relief
Nate agrees to sell his boat to Tina. In the contract, Nate agrees to deliver the boat in two weeks, but Tina learns that he is looking for another buyer who will pay a higher price. Tina turns to the court to stop Nate from selling his boat to any other party. In this case, she is seeking _____. Multiple Choice restitution consequential damage liquidated damage injunctive relief
The delegator suffers liability for the breach of contract.
Parties to a contract may substitute another party to perform any duties owed under the agreement. Which of the following statements is true of this act of delegation? Multiple Choice The delegatee can transfer the contract back to the delegator. The delegatee becomes wholly responsible for the obligation. The delegator suffers liability for the breach of contract. The delegator has the power to delegate the task to a competitor of the obligee.
If Ricardo injures a pedestrian when he stops along his usual route to buy lunch on a working day. Explanation If Ricardo injures a pedestrian when he is on his way to buy lunch on a working day, then it will be considered a detour under the doctrine of respondeat superior. If the conduct is a small-scale deviation that is normally expected in a workday, it is considered a simple detour. Detours are within the ambit of respondeat superior.
Ricardo is employed as a van driver by Fast Track, a courier service. Which of the following is a court most likely to consider a detour under the ambit of respondeat superior? Multiple Choice If Ricardo injures a pedestrian when he leaves his usual route to buy a gift for his daughter during working hours. If Ricardo injures a pedestrian when he takes a different route to deliver a package because the usual route was blocked. If Ricardo injures a pedestrian when he is on his way home after working hours. If Ricardo injures a pedestrian when he stops along his usual route to buy lunch on a working day.
Ted is not entitled to overtime pay.
Ted works at Silvia's Inn from Monday to Friday. He works for 37 hours a week at a rate of $10 per hour. On a particular Friday, Silvia asks Ted to stay back and work two extra hours. According to the Fair Labor Standards Act (FLSA), which of the following statements is most likely to be true in this scenario? Multiple Choice Ted will receive overtime pay at the rate of $15 an hour. Ted is entitled to overtime pay only if he works three extra hours. Ted is not entitled to overtime pay. Ted will receive overtime pay at the rate of $20 an hour.
gender discrimination Explanation The FLSA does not address gender discrimination at the workplace. The statute's primary provisions mandate (1) payment of a minimum wage, (2) a maximum 40-hour workweek, (3) overtime pay, and (4) restrictions on children working in certain occupations and during certain hours.
The Fair Labor Standards Act (FLSA) does NOT regulate _____. Multiple Choice overtime wages gender discrimination child labor work hours
the CISG allows sellers the right to cure even after the performance period is over.
The U.N. Convention on Contracts for the International Sale of Goods (CISG) is different from the Uniform Commercial Code (UCC) in that Multiple Choice the CISG does not apply to merchants. the UCC has no statute of frauds. the UCC applies to sales contracts that include goods and services. the CISG allows sellers the right to cure even after the performance period is over.
It requires individuals not covered by an employer policy to purchase health insurance from a state health care exchange. Explanation The Patient Protection and Affordable Care Act of 2010 (PPACA) requires employers with 50 or more full-time employees to purchase health care insurance for their employees or face a penalty. It also offers small-business owners (those employing fewer than 25 full-time workers) immediate tax incentives if they offer health care coverage to their employees and pay at least 50 percent of the total costs for their employees' coverage. Individuals not covered through their employer's policy are legally required to purchase health care insurance from a health care exchange that is set up by individual states (or groups of states).
Which of the following is true of the Patient Protection and Affordable Care Act (PPACA)? Multiple Choice It does not provide tax incentives to small employers if they offer health care coverage. It requires individuals not covered by an employer policy to purchase health insurance from a state health care exchange. It applies only to employers that have 50 or more employees. It is only applicable to employees who have worked less than six months in an organization.
Employers do not have the right to monitor personal calls of employees in the workplace. Explanation The ECPA updated existing wiretap laws and restricts an employer from monitoring an employee's personal calls (even those from the workplace) without the employee's consent. Employers may monitor business calls but must disconnect the moment they recognize that a call is personal.
Which of the following is true of the policies laid down by the Electronic Communications Privacy Act (ECPA)? Multiple Choice Employers do not have the right to monitor personal calls of employees in the workplace. Employers are allowed to access an employee's office voicemail without their consent. Employers do not have the right to track websites visited by employees in office systems. Employers require employees' consent to count their keystrokes and mouse clicks in office systems.
A sales agreement made by Mike, a wholesaler, who sells to Sunil, the owner of a retail store.
Which of the following sales agreements is most likely to be subject to Article 2 of the Uniform Commercial Code (UCC) because it represents a merchant transaction? Multiple Choice A sales agreement made by Gus, who regularly provides tutoring services to high-school students. A sales agreement made by Sally, who runs a pet clinic. A sales agreement made by Sonia, a college student, who sells her old laptop to a friend. A sales agreement made by Mike, a wholesaler, who sells to Sunil, the owner of a retail store.
The CISG specifically provides that contracts are not subject to formal writing requirements.
Which of the following statements is true of the U.N. Convention on Contracts for the International Sale of Goods (CISG)? Multiple Choice The CISG provisions apply to transactions in which one party is a nonmerchant. The CISG requires offers to have complete terms in order to be valid and enforceable. The CISG specifically provides that contracts are not subject to formal writing requirements. The CISG does not require a buyer to allow a seller the opportunity to cure.
She must be immediately reinstated at the same rate of pay when she returns. Explanation Wilma must be immediately reinstated at the same rate of pay when she returns. Upon returning from medical leave, employees are guaranteed employment in the same or a similar job at the same rate of pay; and employers must reinstate an FMLA-leave employee immediately upon the employee's notification that the leave is over. The FMLA does not require, however, that returning employees be credited with seniority that was accrued while on leave.
Wilma has been working full time for a large corporation for three years. Her mother has fallen ill and is in need of continuous care for the next few months. Wilma asks her employer for two months' medical leave and is granted approval. Which of the following will be applicable to Wilma according to the Family and Medical Leave Act (FMLA)? Multiple Choice She is not entitled to any health care benefits during the leave period. She is entitled to a regular salary while on leave. She must be immediately credited with seniority when she returns. She must be immediately reinstated at the same rate of pay when she returns.
trade libel.
Zoe charges a product liability case against Green-On Inc. stating that the brand's product caused her skin allergies. Zoe may pursue a legal remedy against Green-On Inc. under all of the theories listed below except Multiple Choice negligence. trade libel. strict liability. warranty.
Actual authority Explanation Typically, an agent's power to bind is through actual authority, which arises either when the parties expressly agree to create an agency relationship or when the authority is implied based on custom or course of past dealings.
_____ arises either when the parties in an agency relationship expressly agree to create the relationship or when the authority is implied based on custom or course of past dealings. Multiple Choice Ratification Retroactive power Apparent authority Actual authority
Disgorgement Explanation If the agent breaches the duty of loyalty, the principal's remedies include the ability to rescind any transaction between the principal and agent. A court may also order the agent to return any funds earned as a result of the breaching conduct (this is known as disgorgement).
_____ is best described as a court's order to an agent to return any funds earned as a result of breaching the duty of loyalty in an agency relationship. Multiple Choice Renunciation Disgorgement Indemnification Reimbursement
