Question 1

Compared to an employee,an independent contractor is characterized by:

Accepted Answer

A)  not being paid as much for the work performed. 
B)  a lack of liability for his or her own actions. 
C)  more freedom to perform designated work in a manner he or she deems appropriate. 
D)  less ability to hire others for assistance. 
E)  more control exercised by the principal. 
A)  not being paid as much for the work performed. 
B)  a lack of liability for his or her own actions. 
C)  more freedom to perform designated work in a manner he or she deems appropriate. 
D)  less ability to hire others for assistance. 
E)  more control exercised by the principal.

Question 2

Mary has been hired to write courses for a Web-based training organization.Mary works at the organization's corporate office.She is given content guidelines,a contract for each course that she writes,and she is paid a flat fee upon satisfactory completion of the course.It can take anywhere from two weeks to six weeks to complete a course.The organization wants its affiliated contractors to work in its corporate office with a regular forty-hour workweek,unless they need to be elsewhere in order to conduct content-related research.The organization provides a computer to Mary.Mary also is able to use the services of other employees at the organization for the purposes of word processing and editing.Is Mary an employee,or an independent contractor?

Accepted Answer

Mary is probably an independent contract

Question 3

Undisclosed agencies are unlawful.

Accepted Answer

A) True 
 B)False

Question 4

As the Wyoming Tetons are playing the Missouri Ozarks in a baseball game,a fan who is sitting near the Tetons' dugout starts yelling at Mickey Macho,one of the Tetons' relief pitchers,telling him that his pink minivan makes him look like a suburban family man.Macho,because he feels insulted,picks up a nearby bench and throws it at the fan,who is injured as a result.The fan then sues the Tetons.The fan could recover from the Tetons:

Accepted Answer

A)  under the "work-related" test, but not under the "motivation" test. 
B)  under the "motivation" test, but not under the "work-related" test. 
C)  under either the "motivation" or the "work-related" test. 
D)  under neither the "work-related" test nor the "motivation" test. 
E)  under the "work-related" test, but only if the fan can prove that the fan did not assume the risk. 
A)  under the "work-related" test, but not under the "motivation" test. 
B)  under the "motivation" test, but not under the "work-related" test. 
C)  under either the "motivation" or the "work-related" test. 
D)  under neither the "work-related" test nor the "motivation" test. 
E)  under the "work-related" test, but only if the fan can prove that the fan did not assume the risk.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

What distinguishes the duties of reimbursement and indemnification?

Accepted Answer

A)  Reimbursement is an agent's duty, while indemnification is a principal's duty. 
B)  Reimbursement is a principal's duty, while indemnification is an agent's duty. 
C)  Reimbursement relates to expenses incurred by the agent that were authorized by the principal, within the scope of the agency, and necessary to discharge the agent's duties in carrying out the agency, while indemnification typically relates to losses suffered by the agent because of the principal's misconduct. 
D)  Reimbursement relates to third parties, while indemnification relates to the principal. 
E)  Reimbursement applies only to actions that were within the scope of the agency, while indemnification relates to all actions of the agent. 
A)  Reimbursement is an agent's duty, while indemnification is a principal's duty. 
B)  Reimbursement is a principal's duty, while indemnification is an agent's duty. 
C)  Reimbursement relates to expenses incurred by the agent that were authorized by the principal, within the scope of the agency, and necessary to discharge the agent's duties in carrying out the agency, while indemnification typically relates to losses suffered by the agent because of the principal's misconduct. 
D)  Reimbursement relates to third parties, while indemnification relates to the principal. 
E)  Reimbursement applies only to actions that were within the scope of the agency, while indemnification relates to all actions of the agent.

Question 7

Agency by estoppels arises when a principal creates the appearance of an agency that in actuality does not exist.

Accepted Answer

A) True 
 B)False

Question 8

The party who employs an independent contractor is called a principal.

Accepted Answer

A) True 
 B)False

Question 9

Under common law,a principal generally is not liable for injuries caused by its agents and employees while they are on their way to or from work.

Accepted Answer

A) True 
 B)False

Question 10

The fact that Basil hires employees to work at a cheese shop he manages,despite the fact that his employment agreement with the store owner says nothing about him being able to hire employees,is an example of:

Accepted Answer

A)  port authority. 
B)  apparent authority. 
C)  express authority. 
D)  implied authority. 
E)  ratification authority. 
A)  port authority. 
B)  apparent authority. 
C)  express authority. 
D)  implied authority. 
E)  ratification authority.

Question 11

Donna contracted with Michael's Drug Corporation to buy sedatives on behalf of Clark,a dentist.Clark instructed Donna to use Donna's own name,and to not disclose to Michael's that she was working on Clark's behalf.If Donna signs the contract in her name only and Clark refuses to honor it:

Accepted Answer

A)  Donna is not liable on the contract, because she only acted as an agent. 
B)  Donna is liable on the contract, but she may sue Clark for indemnification. 
C)  Donna is liable on the contract, but she may sue Clark for reimbursement. 
D)  Donna is liable on the contract, but she may sue Clark for compensation. 
E)  Clark has no liability to anyone, since his name was never disclosed. 
A)  Donna is not liable on the contract, because she only acted as an agent. 
B)  Donna is liable on the contract, but she may sue Clark for indemnification. 
C)  Donna is liable on the contract, but she may sue Clark for reimbursement. 
D)  Donna is liable on the contract, but she may sue Clark for compensation. 
E)  Clark has no liability to anyone, since his name was never disclosed.

Question 12

The basic rule for whether the principal is liable for the negligence of an agent is whether the principal knew about the agent's commission of the tort.

Accepted Answer

A) True 
 B)False

Question 13

There are two (2)kinds of powers of attorney: 1)the express power of attorney; and 2)the implied power of attorney

Accepted Answer

A) True 
 B)False

Question 14

With regard to an implied agency,implied authority can be conferred by either industry custom,prior dealing between the parties,the agent's position and acts deemed necessary to carry out the agent's duties,or other factors a court deems relevant.

Accepted Answer

A) True 
 B)False

Question 15

Agents are generally permitted to engage in undisclosed self-dealing with the principal.

Accepted Answer

A) True 
 B)False

Question 16

An agent owes a ________ duty not to act adversely to the interests of the principal.

Accepted Answer

A)  qualified 
B)  conditional 
C)  fiduciary 
D)  emissary 
E)  eleemosynary 
A)  qualified 
B)  conditional 
C)  fiduciary 
D)  emissary 
E)  eleemosynary

Question 17

A principal has a duty of compensation:

Accepted Answer

A)  in all agency arrangements. 
B)  only in agency arrangements that expressly provide for compensation. 
C)  in all agency arrangements, except for "gratuitous" agency arrangements. 
D)  to pay the agent before he or she performs agency duties. 
E)  to pay the agent, even where the agent failed to produce the required result under a contingency fee agreement. 
A)  in all agency arrangements. 
B)  only in agency arrangements that expressly provide for compensation. 
C)  in all agency arrangements, except for "gratuitous" agency arrangements. 
D)  to pay the agent before he or she performs agency duties. 
E)  to pay the agent, even where the agent failed to produce the required result under a contingency fee agreement.

Question 18

A principal is liable for the innocent,but not the intentional,misrepresentations made by an agent acting within the scope of employment.

Accepted Answer

A) True 
 B)False

Question 19

A principal gives an agent express authority to "do what it takes to get my car running right." The authority that the agent has to enter into contracts for the purchase of auto parts is:

Accepted Answer

A)  apparent authority 
B)  authority by estoppel. 
C)  inherent authority. 
D)  express authority. 
E)  implied authority. 
A)  apparent authority 
B)  authority by estoppel. 
C)  inherent authority. 
D)  express authority. 
E)  implied authority.

Question 20

Agents are prohibited from competing with the principal during the course of an agency unless the principal agrees.

Accepted Answer

A) True 
 B)False

Exam 25: Agency Law

Compared to an employee,an independent contractor is characterized by:

Undisclosed agencies are unlawful.

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

What distinguishes the duties of reimbursement and indemnification?

Agency by estoppels arises when a principal creates the appearance of an agency that in actuality does not exist.

The party who employs an independent contractor is called a principal.

Under common law,a principal generally is not liable for injuries caused by its agents and employees while they are on their way to or from work.

The fact that Basil hires employees to work at a cheese shop he manages,despite the fact that his employment agreement with the store owner says nothing about him being able to hire employees,is an example of:

Donna contracted with Michael's Drug Corporation to buy sedatives on behalf of Clark,a dentist.Clark instructed Donna to use Donna's own name,and to not disclose to Michael's that she was working on Clark's behalf.If Donna signs the contract in her name only and Clark refuses to honor it:

The basic rule for whether the principal is liable for the negligence of an agent is whether the principal knew about the agent's commission of the tort.

There are two (2)kinds of powers of attorney: 1)the express power of attorney; and 2)the implied power of attorney

With regard to an implied agency,implied authority can be conferred by either industry custom,prior dealing between the parties,the agent's position and acts deemed necessary to carry out the agent's duties,or other factors a court deems relevant.

Agents are generally permitted to engage in undisclosed self-dealing with the principal.

An agent owes a ________ duty not to act adversely to the interests of the principal.

A principal has a duty of compensation:

A principal is liable for the innocent,but not the intentional,misrepresentations made by an agent acting within the scope of employment.

A principal gives an agent express authority to "do what it takes to get my car running right." The authority that the agent has to enter into contracts for the purchase of auto parts is:

Agents are prohibited from competing with the principal during the course of an agency unless the principal agrees.

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

Filters