Question 1

A principal can authorize an independent contractor to enter into contracts.

Accepted Answer

A) True 
 B)False

Question 2

A durable power of attorney remains effective even though the principal is incapacitated.

Accepted Answer

A) True 
 B)False

Question 3

Authority that a third party may reasonably assume the agent possesses is called:

Accepted Answer

A)  express authority. 
B)  implied authority. 
C)  apparent authority. 
D)  incidental authority. 
E)  equitable authority. 
A)  express authority. 
B)  implied authority. 
C)  apparent authority. 
D)  incidental authority. 
E)  equitable authority.

Question 4

In an agency relationship,which of the following is not one of the common ways in which the duty of loyalty can be breached?

Accepted Answer

A)  self-dealing 
B)  dual agency 
C)  usurping an opportunity. 
D)  using general knowledge 
E)  misusing confidential information 
A)  self-dealing 
B)  dual agency 
C)  usurping an opportunity. 
D)  using general knowledge 
E)  misusing confidential information

Question 5

If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so,the settlement agreement is binding.

Accepted Answer

A) True 
 B)False

Question 6

The legal rule of ________ knowledge means that the principal is assumed to know what the agent knows.

Accepted Answer

A)  attributed 
B)  imputed 
C)  asserted 
D)  implied 
E)  transferred 
A)  attributed 
B)  imputed 
C)  asserted 
D)  implied 
E)  transferred

Question 7

When an express agency agreement does not provide enough detailed agency powers to cover all contingent situations,what type of authority does an agent have to act in the event of an emergency that is not specifically covered by the agency agreement?

Accepted Answer

A)  express agency 
B)  apparent agency 
C)  agency by estoppel 
D)  incidental authority 
E)  apparent authority 
A)  express agency 
B)  apparent agency 
C)  agency by estoppel 
D)  incidental authority 
E)  apparent authority

Question 8

An agent cannot usurp an opportunity that belongs to the principal.

Accepted Answer

A) True 
 B)False

Question 9

The crucial factor in determining whether someone is an independent contractor or an employee is the ________.

Accepted Answer

A)  amount of time the worker has been associated with the principal 
B)  degree of control the principal has over the worker 
C)  degree of skill necessary to complete the assigned task 
D)  the method of paying the worker, whether by time or by job 
E)  job title the principal assigns to the worker 
A)  amount of time the worker has been associated with the principal 
B)  degree of control the principal has over the worker 
C)  degree of skill necessary to complete the assigned task 
D)  the method of paying the worker, whether by time or by job 
E)  job title the principal assigns to the worker

Question 10

If an agent exceeds the scope of his or her authority,the principal is not liable on the contract unless the principal ratifies it.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true regarding a situation where an agent exceeds the scope of his or her authority in entering into a contract?

Accepted Answer

A)  The agent would never be held liable to the third party. 
B)  The agent would always be held liable to the third party. 
C)  The principal would always be held liable to the third party. 
D)  The principal would never be held liable to the third party. 
E)  The principal is not liable on the contract unless the principal ratifies it. 
A)  The agent would never be held liable to the third party. 
B)  The agent would always be held liable to the third party. 
C)  The principal would always be held liable to the third party. 
D)  The principal would never be held liable to the third party. 
E)  The principal is not liable on the contract unless the principal ratifies it.

Question 12

Which of the following is created based on a specific agreement?

Accepted Answer

A)  implied agency 
B)  express agency 
C)  apparent agency 
D)  agency by necessity 
E)  agency by ratification 
A)  implied agency 
B)  express agency 
C)  apparent agency 
D)  agency by necessity 
E)  agency by ratification

Question 13

Which of the following agency agreements gives an agent the broadest range of powers?

Accepted Answer

A)  a general power of attorney 
B)  a special power of attorney 
C)  a general attorney-in-fact 
D)  a special attorney-in-fact 
E)  an implied power of attorney 
A)  a general power of attorney 
B)  a special power of attorney 
C)  a general attorney-in-fact 
D)  a special attorney-in-fact 
E)  an implied power of attorney

Question 14

The "motivation" test and the "work-related" test are used to determine whether:

Accepted Answer

A)  an employer is responsible for the intentional tort of an employee. 
B)  an employer is responsible for the negligence of an employee. 
C)  an employee is responsible for a contract entered into on behalf of the employer. 
D)  an employee is responsible for the tort he commits while on the job. 
E)  an employee is responsible for negligence committed while on the job. 
A)  an employer is responsible for the intentional tort of an employee. 
B)  an employer is responsible for the negligence of an employee. 
C)  an employee is responsible for a contract entered into on behalf of the employer. 
D)  an employee is responsible for the tort he commits while on the job. 
E)  an employee is responsible for negligence committed while on the job.

Question 15

An agency can be designed to terminate upon the occurrence of an event that is outside the control of the agent or principal.

Accepted Answer

A) True 
 B)False

Question 16

________ agency occurs when an agent acts for two (2)or more different principals in the same transaction.

Accepted Answer

A)  Bilateral 
B)  Mutual 
C)  Dual 
D)  Bifurcated 
E)  Common 
A)  Bilateral 
B)  Mutual 
C)  Dual 
D)  Bifurcated 
E)  Common

Question 17

In a power of attorney relationship,the agent is called the attorney-in-fact even though he or she is not a lawyer.

Accepted Answer

A) True 
 B)False

Question 18

Jon hired Sarah to manage his store.Sarah negligently hit Aimee with a shopping cart,injuring her as a result.Jon is liable to the customer.

Accepted Answer

A) True 
 B)False

Question 19

Allan hires a licensed independent contractor demolition company to level a building.If the demolition company takes every precaution,but a person is nevertheless injured,Allan is liable for the injury.

Accepted Answer

A) True 
 B)False

Question 20

Under agency law,the legal significance of a "frolic and detour" is that:

Accepted Answer

A)  an employee can be liable to an employer if the frolic and detour is not authorized. 
B)  it can determine if an employee is liable on a contract made on the employer's behalf. 
C)  it can determine whether someone working for a business is an employee or an independent contractor. 
D)  it can determine whether an employer is liable for the negligence of an employee. 
E)  it can determine whether an employee is liable for torts he commits on the job. 
A)  an employee can be liable to an employer if the frolic and detour is not authorized. 
B)  it can determine if an employee is liable on a contract made on the employer's behalf. 
C)  it can determine whether someone working for a business is an employee or an independent contractor. 
D)  it can determine whether an employer is liable for the negligence of an employee. 
E)  it can determine whether an employee is liable for torts he commits on the job.

Exam 25: Agency Law

A principal can authorize an independent contractor to enter into contracts.

A durable power of attorney remains effective even though the principal is incapacitated.

Authority that a third party may reasonably assume the agent possesses is called:

In an agency relationship,which of the following is not one of the common ways in which the duty of loyalty can be breached?

If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so,the settlement agreement is binding.

The legal rule of ________ knowledge means that the principal is assumed to know what the agent knows.

When an express agency agreement does not provide enough detailed agency powers to cover all contingent situations,what type of authority does an agent have to act in the event of an emergency that is not specifically covered by the agency agreement?

An agent cannot usurp an opportunity that belongs to the principal.

The crucial factor in determining whether someone is an independent contractor or an employee is the ________.

If an agent exceeds the scope of his or her authority,the principal is not liable on the contract unless the principal ratifies it.

Which of the following is true regarding a situation where an agent exceeds the scope of his or her authority in entering into a contract?

Which of the following is created based on a specific agreement?

Which of the following agency agreements gives an agent the broadest range of powers?

The "motivation" test and the "work-related" test are used to determine whether:

An agency can be designed to terminate upon the occurrence of an event that is outside the control of the agent or principal.

________ agency occurs when an agent acts for two (2)or more different principals in the same transaction.

In a power of attorney relationship,the agent is called the attorney-in-fact even though he or she is not a lawyer.

Jon hired Sarah to manage his store.Sarah negligently hit Aimee with a shopping cart,injuring her as a result.Jon is liable to the customer.

Allan hires a licensed independent contractor demolition company to level a building.If the demolition company takes every precaution,but a person is nevertheless injured,Allan is liable for the injury.

Under agency law,the legal significance of a "frolic and detour" is that:

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Investor Protection,E-Securities Transactions,and Wall Street Reform

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

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