Question 1

An employee is an agent,even if he or she is not specifically empowered to enter into contracts on the principal-employer's behalf.

Accepted Answer

A) True 
 B)False  False

Question 2

In an express agency,the agent has the authority to contract or otherwise act on the principal's behalf,as stated in the agency agreement.

Accepted Answer

A) True 
 B)False  True

Question 3

Agency relationships are formed by the mutual consent of an accessory and an agent.

Accepted Answer

A) True 
 B)False  False

Question 4

The principal will be held liable for any negligence of her agent committed during the time period the agent has agreed to act as agent.

Accepted Answer

A) True 
 B)False

Question 5

The extent of the agent's authority in a principal-agent relationship is governed by any express agreement between the parties and implied from the circumstances of the agency.

Accepted Answer

A) True 
 B)False

Question 6

Employees may only enter into contracts that are within the scope of their employment.

Accepted Answer

A) True 
 B)False

Question 7

An agency can arise in any of the following four (4)ways: 1)formal agency; 2)informal agency; 3)transparent agency; and 4)agency by certification.

Accepted Answer

A) True 
 B)False

Question 8

An agent negotiates a contract with a third party for which the agent did not have express authority.Which of the following is true?

Accepted Answer

A)  The principal can never be held liable on the contract, because the agent exceeded his authority. 
B)  The principal can be liable on the contract, but only if the agent had implied authority to enter into the contract. 
C)  The principal can be liable on the contract, but only if apparent authority was present. 
D)  The principal may not ratify the contract. 
E)  The principal may ratify the contract, or the principal may be held responsible if the existence of either implied or apparent authority can be established. 
A)  The principal can never be held liable on the contract, because the agent exceeded his authority. 
B)  The principal can be liable on the contract, but only if the agent had implied authority to enter into the contract. 
C)  The principal can be liable on the contract, but only if apparent authority was present. 
D)  The principal may not ratify the contract. 
E)  The principal may ratify the contract, or the principal may be held responsible if the existence of either implied or apparent authority can be established.

Question 9

Even if the home countries of the principal and the agent are at war,the parties may choose to continue the agency.

Accepted Answer

A) True 
 B)False

Question 10

The president of a corporation usually has the authority to enter into major contracts on the corporation's behalf.

Accepted Answer

A) True 
 B)False

Question 11

A partially-disclosed agency exists where the third party is aware that the party he is dealing with is an agent,but does not know the identity of the principal.

Accepted Answer

A) True 
 B)False

Question 12

What is the primary purpose of an agent in a principal-agent relationship?

Accepted Answer

A)  protect the principal from legal liability 
B)  conduct business on behalf of the principal 
C)  enter into contracts with the principal 
D)  operate as a partner with the principal 
E)  maintain the principal's status quo 
A)  protect the principal from legal liability 
B)  conduct business on behalf of the principal 
C)  enter into contracts with the principal 
D)  operate as a partner with the principal 
E)  maintain the principal's status quo

Question 13

Which of the following is true about determining whether someone working for another person is an independent contractor or an employee?

Accepted Answer

A)  The classification of the person doing the work depends on that person's job title. 
B)  The classification of the person doing the work depends on whether the parties to the arrangement consider the person doing the work to be an employee or an independent contractor. 
C)  The classification of the person doing the work depends on whether the person is also acting as an agent. 
D)  The classification of the person doing the work depends on a number of factors, with no single factor being any more significant that the others. 
E)  The classification of the person doing the work depends on a number of factors, with the most important factor being the degree of control over that person's work exercised by the person who is paying for the work. 
A)  The classification of the person doing the work depends on that person's job title. 
B)  The classification of the person doing the work depends on whether the parties to the arrangement consider the person doing the work to be an employee or an independent contractor. 
C)  The classification of the person doing the work depends on whether the person is also acting as an agent. 
D)  The classification of the person doing the work depends on a number of factors, with no single factor being any more significant that the others. 
E)  The classification of the person doing the work depends on a number of factors, with the most important factor being the degree of control over that person's work exercised by the person who is paying for the work.

Question 14

Express agency is the most common form of agency.

Accepted Answer

A) True 
 B)False

Question 15

The "frolic and detour" rule states that an agent is liable to the principal for damages resulting from the agent going on a frolic and detour.

Accepted Answer

A) True 
 B)False

Question 16

A general power of attorney confers broad powers on the agent to act in any matters on the principal's behalf.

Accepted Answer

A) True 
 B)False

Question 17

Through agency by ratification,the principal is bound to perform,and the agent is relieved of any liability for misrepresentation.

Accepted Answer

A) True 
 B)False

Question 18

An agent who enters into a contract with a principal has two (2)distinct obligations: (1)to perform the lawful duties expressed in the contract; and (2)to meet the standards of reasonable care,skill,and diligence implicit in all contracts.

Accepted Answer

A) True 
 B)False

Question 19

A power of attorney is often used by a principal to give an agent the power to sign legal documents,such as deeds to real estate,on behalf of the principal.

Accepted Answer

A) True 
 B)False

Question 20

A principal-accessory 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.

Accepted Answer

A) True 
 B)False

Exam 25: Agency Law

An employee is an agent,even if he or she is not specifically empowered to enter into contracts on the principal-employer's behalf.

In an express agency,the agent has the authority to contract or otherwise act on the principal's behalf,as stated in the agency agreement.

Agency relationships are formed by the mutual consent of an accessory and an agent.

The principal will be held liable for any negligence of her agent committed during the time period the agent has agreed to act as agent.

The extent of the agent's authority in a principal-agent relationship is governed by any express agreement between the parties and implied from the circumstances of the agency.

Employees may only enter into contracts that are within the scope of their employment.

An agency can arise in any of the following four (4)ways: 1)formal agency; 2)informal agency; 3)transparent agency; and 4)agency by certification.

An agent negotiates a contract with a third party for which the agent did not have express authority.Which of the following is true?

Even if the home countries of the principal and the agent are at war,the parties may choose to continue the agency.

The president of a corporation usually has the authority to enter into major contracts on the corporation's behalf.

A partially-disclosed agency exists where the third party is aware that the party he is dealing with is an agent,but does not know the identity of the principal.

What is the primary purpose of an agent in a principal-agent relationship?

Which of the following is true about determining whether someone working for another person is an independent contractor or an employee?

Express agency is the most common form of agency.

The "frolic and detour" rule states that an agent is liable to the principal for damages resulting from the agent going on a frolic and detour.

A general power of attorney confers broad powers on the agent to act in any matters on the principal's behalf.

Through agency by ratification,the principal is bound to perform,and the agent is relieved of any liability for misrepresentation.

An agent who enters into a contract with a principal has two (2)distinct obligations: (1)to perform the lawful duties expressed in the contract; and (2)to meet the standards of reasonable care,skill,and diligence implicit in all contracts.

A power of attorney is often used by a principal to give an agent the power to sign legal documents,such as deeds to real estate,on behalf of the principal.

A principal-accessory 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.

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