WALBCH14TF
A company hired independent contractors to sell their products door-to-door. One sales rep, who had a criminal history, assaulted a customer, who sued the parent company. The company was not liable because the sales rep was an independent contractor.
False
A contract made by an agent on behalf of an undisclosed principal is never binding on a third party who did not know about the principal.
False
A general power of attorney is usually given to a special agent.
False
A principal may designate someone to do all acts that can be legally delegated to an agent. That agent is called a general agent.
False
A principal may designate someone to execute all transactions connected with running a business. Such a person is known as a special agent.
False
A subagent is an agent of an agent, not an agent of the principal, so owes no duty to the principal, only to the agent.
False
Agency relationships must be evidenced by a written contract.
False
Agency relationships used to be common in decades past, but in recent years they have fallen out of favor.
False
Agents rarely can change a principal's legal obligations.
False
All employee handbooks are held to create binding contractual obligations on the part of employers who use them.
False
All valid agency relationships are contracts.
False
An agent is expected to perform responsibilities with the degree of care that is called ordinary care under the circumstances.
False
An agent makes a contract with a third party on behalf of the disclosed principal. The principal then breaches the contract. The third party may sue the agent to recover damages.
False
An agent may not legally bind a principal to contracts without the principal agreeing to each contract.
False
An independent contractor is an agent and an employee of the person who hired her.
False
Apparent authority arises when agent concludes that there is an appearance of authority from the principal to act on behalf of the principal in dealing with third parties.
False
Express or actual authority may only be created by written instruction or written contract.
False
Federal law states that employers are not liable for actions of employees based on their use of social media in the workplace.
False
Fiduciary duties apply to principals; agents have only non-fiduciary duties.
False
Geary was fired by his supervisor for revealing to higher management a serious problem with a company product. He sued for wrongful dismissal. You would expect the court to hold that Geary would be successful because he proved that if the product had gone to market it could have cost many lives.
False
Gratuitous agents are appointed by other agents to undertake some work for the principal.
False
If either the principal or agent dies, the agency relationship is suspended until replacements continue the agency's purpose.
False
If money is commingled (funds of agent mixed with funds of the principal), a violation of duty to account occurs only if the principal can show actual harm
False
If the subject matter of an agency agreement is destroyed, the agency relationship continues until new subject matter is found.
False
In an agency relationship, the agent is a neutral party regarding contracts between the principal and third parties.
False
In her relations with her principal, an agent must meet the "ordinary standard of conduct" imposed on people engaged in business dealings.
False
Legal obligations in an agency run from agent to principal, not principal to agent.
False
One factor that courts may consider when trying to decide if an independent contract or employee relationship exists is whether or not the contractor has the right to direct or control the work of the employer.
False
Power of attorney may only be held by a licensed attorney.
False
Principals are liable for all torts committed by their agents.
False
Principals are presumed at common law to have no duties to their agents.
False
Principals only duty to agents is to compensate.
False
The legal document intended for the purpose of expressly establishing an agency is the attorney-in-fact.
False
The two general classifications of authority an agent can possess are general authority and implied authority.
False
A check-out clerk at the grocery store is typically in a master-servant relationship, not an agency relationship.
True
A general power of attorney is usually given to a universal agent.
True
A major duty of principals to their agents is to indemnify them under most circumstances for liabilities incurred in completing the purpose of the agency.
True
A person appointed by an agent to help the agent for certain specific transactions is a special agent.
True
A principal held responsible for the torts of an agent is said to have vicarious liability.
True
A principal is contractually liable to a third party if that party enters into a contract presented by an agent with apparent authority to act for the principal.
True
A principal may designate someone to do all acts that can be legally delegated to an agent. That agent is called a universal agent.
True
A principal's major reason for developing agency relationships is to expand business opportunities.
True
A real estate agent who sells a house on commission is an agent, not an employee of the home owner.
True
A senior manager at a car dealership is likely both an agent and employee.
True
A stocker in a grocery store is an employee but not an agent for the store.
True
Actual authority involves powers given by the principal to the agent.
True
Agencies may be terminated by operation of law, without either party taking any action.
True
Agency relationships may be based on an oral agreement.
True
Agents have a duty of obedience to their principals, which means that if the agent ignores the principal's instructions, she violates her duty.
True
Agents have a fiduciary duty to their principals.
True
Agents have no obligation to engage in activity on behalf of principals that could lead to personal liability.
True
An agency relationship may terminate by lapse of time.
True
An agency that is for the sale of land usually must be evidenced by a written contract.
True
An agency that is to last more than one year usually must be evidenced by a written contract.
True
An agent has a duty to notify his principal of all facts relevant to the purpose of the agency.
True
An agent's authority is the power to change the principal's legal obligations.
True
An auctioneer who sells goods is likely an agent and independent contractor.
True
An employer could be liable for acts of an employee based on negligent hiring.
True
An employer could be liable for sexual harassment by an employee using social media improperly in the workplace.
True
An employer held responsible for the torts of an employee is said to have vicarious liability.
True
An express contract for certain terms of employment can restrict employment at-will.
True
An express ratification takes place when the principal gives a clear signal to be bound by an action that would otherwise be unauthorized.
True
An independent contractor is not an employee of the person who hires her.
True
An independent contractor is usually not an agent of the principal who hired her, but can have that role too.
True
An undisclosed principal is a principal whose identity is unknown to the third party with whom the agent is involved.
True
Apparent authority arises when the principal creates an appearance of authority in an agent that leads a third party to conclude that the agent has authority to act for the principal.
True
Destruction of the subject matter of an agency ends an agency relationship
True
Employers may wish to state that employee handbooks are not binding contracts
True
Employment-at-will means that, unless a contract holds otherwise, employers are free to fire workers at any time for any reason and employees are free to quit their jobs at any time for any reason.
True
European nations generally have more detailed rules regarding employees than does the U.S.
True
Geary was fired by his supervisor for revealing to higher management a serious problem with a company product. He sued for wrongful dismissal. You would expect the court held that Geary's dismissal was proper under employment-at-will despite his good motives.
True
If Hilda volunteers to sell Heidi's horse for her, because Hilda knows lots of potential buyers, and Heidi agrees, Hilda is a gratuitous agent.
True
If a hurricane is coming and you spend $800 to buy supplies to protect your neighbor's house against storm damage, when they are gone and cannot be reached, you may have created an agency by operation of law.
True
If a principal behaves as if he intended to ratify an unauthorized agreement between his agent and a third party, a court will find that implied ratification has occurred.
True
If an American company sends an American employee to work in its office in France, the employee may be under French employment law.
True
If an agency relationship did not establish a rate of compensation for the duties of the agent, the principal must pay the "customary" rate for such services.
True
If an agent commits a tort outside the agent's scope of employment, the agent is liable to the third party for damages incurred.
True
If an agent is discovered to be representing conflicting interests, she has violated her duty of loyalty.
True
If someone volunteers to act as a gratuitous agent, and performs a task, such as selling a car, for a principal, the legal consequences are the same as if the agent were paid.
True
If you hire a builder to build a home, he is likely an independent contractor for you.
True
In an emergency, when someone acts on behalf of someone else in order to avoid a loss, the law may create an agency by operation of law.
True
In the case of an undisclosed principal, a third party is unaware of the identity of the principal as well as the existence of an agency relationship.
True
Many courts hold employee handbooks may create contractual obligations between employers and employees.
True
Power of attorney is based on a legal document.
True
Power of attorney is given to an agent called an attorney-in-fact.
True
Principals are presumed to have a duty to cooperate with their agents.
True
Principals have an obligation to reimburse their agents for their normal business expenses related to the agency, unless otherwise agreed
True
Principals may be bound by the unauthorized acts of agents if the agent appears to third parties to have the authority to act.
True
Ratification is an affirmation by the principal of an unauthorized agreement by a person acting as an agent with a third party.
True
Some state courts hold that employment contracts contain implied covenants of good faith and fair dealing.
True
The agency relationship is a key part to most business operations.
True
The death of a principal would affect the validity of contracts then made by the agent for the principal.
True
The rule of law imposing vicarious liability on an innocent principal for the torts of an agent is respondeat superior.
True
The two general classifications of authority an agent can possess are actual authority and implied authority.
True
Traditionally, employees did not act as agents for their principals, but today employees may well also be agents.
True
When a principal's conduct appears consistent with the existence of an agency relationship, an agency by estoppel may be created.
True
When an agent has the power to do whatever is reasonable and customary to carry out the agency purpose, the agent has implied authority.
True
When an agent is allowed to delegate duties to other agents, the other agents are subagents who assist the agent.
True
When an agent is authorized to execute all transactions connected with a business, the person is a general agent.
True
When an agent pays for the right to exercise authority for a business, there is an agency coupled with an interest.
True
