Question 1

An agent is not liable to the principal for any injuries resulting from a breach of duty to notify.

Accepted Answer

A) True 
 B)False

Question 2

An express agency agreement that is often used to give an agent the control to sign legal documents on behalf of the principal is known as a(n)________.

Accepted Answer

A) assignment 
B) accommodation 
C) power of attorney 
D) letter of credit 
A) assignment 
B) accommodation 
C) power of attorney 
D) letter of credit

Question 3

Taylor gives a power of attorney to his twin brother Corey, permitting Corey to make all decisions on his behalf while he is abroad.As per the terms of the power of attorney, Corey is allowed make decisions to purchase or sell stocks on Taylor's behalf, sell Taylor's real estate if he deems it to be in Taylor's best interest, pursue or defend lawsuits on Taylor's behalf, and make all other relevant decisions for Taylor.What kind of power of attorney would confer such powers to Corey?

Accepted Answer

A) a special power of attorney 
B) a limited power of attorney 
C) an implied power of attorney 
D) a general power of attorney 
A) a special power of attorney 
B) a limited power of attorney 
C) an implied power of attorney 
D) a general power of attorney

Question 4

________ is a special type of agency that is created for the agent's benefit and that the principal cannot revoke.

Accepted Answer

A) Agency by ratification 
B) Assignment 
C) Accommodation 
D) Agency coupled with an interest 
A) Agency by ratification 
B) Assignment 
C) Accommodation 
D) Agency coupled with an interest

Question 5

Which of the following is true about a special power of attorney?

Accepted Answer

A) It is an implied form of power of attorney. 
B) It limits the agents powers to those enumerated in the agreement. 
C) It allows the agent to act in any matters on the principal's behalf. 
D) It only allows certified lawyers to be agents. 
A) It is an implied form of power of attorney. 
B) It limits the agents powers to those enumerated in the agreement. 
C) It allows the agent to act in any matters on the principal's behalf. 
D) It only allows certified lawyers to be agents.

Question 6

The agency of power of attorney is an example of a(n)________ agreement.

Accepted Answer

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

Question 7

The principal works on behalf of an agent.

Accepted Answer

A) True 
 B)False

Question 8

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale.In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed.The contract also stipulates that Marlon should not hire another broker to sell that piece of land till the expiry of the contract period.Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services.
-Which of the following types of agency had Marlon and Nita entered into?

Accepted Answer

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

Question 9

If an agency terminates by operation of law, there is no duty to notify third parties about the termination.

Accepted Answer

A) True 
 B)False

Question 10

If a person employs an architect to design the layout of his or her own home, it would constitute a(n)________ relationship.

Accepted Answer

A) employer-employee 
B) principal-independent contractor 
C) principal-agent 
D) agent-independent contractor 
A) employer-employee 
B) principal-independent contractor 
C) principal-agent 
D) agent-independent contractor

Question 11

A special power of attorney empowers the agent to act in any matters on the principal's behalf without limitation.

Accepted Answer

A) True 
 B)False

Question 12

A principal also owes a duty to indemnify the agent for any losses the agent suffers because of the principal's conduct.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true of an employer-employee relationship?

Accepted Answer

A) An employee has implied power of attorney towards the principal. 
B) An employee has authority to act on behalf of the principal. 
C) An employee can enter into contracts on behalf of the employer. 
D) An employee is hired to perform a task or service. 
A) An employee has implied power of attorney towards the principal. 
B) An employee has authority to act on behalf of the principal. 
C) An employee can enter into contracts on behalf of the employer. 
D) An employee is hired to perform a task or service.

Question 14

Agencies created against public policy are void and unenforceable.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of an express agency?

Accepted Answer

A) The agency involved is allowed to have multiple agents if necessary. 
B) The agency is implied from the conduct of the parties. 
C) The agency comes to effect when the principal ratifies an unauthorized act. 
D) The agency arises when a principal creates the appearance of an agency that does not exist. 
A) The agency involved is allowed to have multiple agents if necessary. 
B) The agency is implied from the conduct of the parties. 
C) The agency comes to effect when the principal ratifies an unauthorized act. 
D) The agency arises when a principal creates the appearance of an agency that does not exist.

Question 16

Any property, money, or other benefit received by the agent in the course of an agency belongs to the principal.

Accepted Answer

A) True 
 B)False

Question 17

The outbreak of a war between the principal's country and the agent's country is grounds for terminating an agency.

Accepted Answer

A) True 
 B)False

Question 18

An agency by ratification occurs when the principal ________.

Accepted Answer

A) accepts an unauthorized act created by an unauthorized agent 
B) accepts an authorized act created by an authorized agent 
C) creates the appearance of an agency that in actuality does not exist 
D) accepts an act carried out under the implied authority of an agent 
A) accepts an unauthorized act created by an unauthorized agent 
B) accepts an authorized act created by an authorized agent 
C) creates the appearance of an agency that in actuality does not exist 
D) accepts an act carried out under the implied authority of an agent

Question 19

Which of the following is true of a principal-independent contractor relationship?

Accepted Answer

A) Principals are bound by the authorized contracts of their independent contractors. 
B) Independent contractors cannot be authorized by principals. 
C) Independent contractors are employees of the principals. 
D) Principals cannot directly employ independent contractors. 
A) Principals are bound by the authorized contracts of their independent contractors. 
B) Independent contractors cannot be authorized by principals. 
C) Independent contractors are employees of the principals. 
D) Principals cannot directly employ independent contractors.

Question 20

Which of the following describes an agency by estoppel?

Accepted Answer

A) an agency that arises when a principal ratifies a contract created by an unauthorized agent 
B) an agency created when a principal and an agent expressly agree to enter into an agency agreement 
C) an agency that is not expressly stated but is implied and inferred in the conduct of the parties 
D) an agency that arises when a principal creates the appearance of an agency that in actuality does not exist 
A) an agency that arises when a principal ratifies a contract created by an unauthorized agent 
B) an agency created when a principal and an agent expressly agree to enter into an agency agreement 
C) an agency that is not expressly stated but is implied and inferred in the conduct of the parties 
D) an agency that arises when a principal creates the appearance of an agency that in actuality does not exist

Exam 29: Agency Formation and Termination

An agent is not liable to the principal for any injuries resulting from a breach of duty to notify.

An express agency agreement that is often used to give an agent the control to sign legal documents on behalf of the principal is known as a(n)________.

________ is a special type of agency that is created for the agent's benefit and that the principal cannot revoke.

Which of the following is true about a special power of attorney?

The agency of power of attorney is an example of a(n)________ agreement.

The principal works on behalf of an agent.

If an agency terminates by operation of law, there is no duty to notify third parties about the termination.

If a person employs an architect to design the layout of his or her own home, it would constitute a(n)________ relationship.

A special power of attorney empowers the agent to act in any matters on the principal's behalf without limitation.

A principal also owes a duty to indemnify the agent for any losses the agent suffers because of the principal's conduct.

Which of the following is true of an employer-employee relationship?

Agencies created against public policy are void and unenforceable.

Which of the following is true of an express agency?

Any property, money, or other benefit received by the agent in the course of an agency belongs to the principal.

The outbreak of a war between the principal's country and the agent's country is grounds for terminating an agency.

An agency by ratification occurs when the principal ________.

Which of the following is true of a principal-independent contractor relationship?

Which of the following describes an agency by estoppel?

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