Question 1

A franchisor has a fiduciary duty towards the franchisee.

Accepted Answer

A) True 
 B)False

Question 2

X Co.in Montreal retains Y as its purchasing agent to purchase goods from all over the world.If Y,having purchased goods in England,enters into an agreement with a shipping company to ship the goods to Montreal

Accepted Answer

A) Y will be in breach of the agency agreement because entering his agency agreement with X Co.is specific. 
B) Y will not be in breach of his agency agreement with X Co.because X Co.has ratified the shipping contract. 
C) Y will not be in breach of his agency agreement with X Co.because he has implied authority to enter into shipping agreements. 
D) Y will be in breach of the agency agreement with X Co.because he has no authority to enter into shipping agreements. 
E) none of the above 
A) Y will be in breach of the agency agreement because entering his agency agreement with X Co.is specific. 
B) Y will not be in breach of his agency agreement with X Co.because X Co.has ratified the shipping contract. 
C) Y will not be in breach of his agency agreement with X Co.because he has implied authority to enter into shipping agreements. 
D) Y will be in breach of the agency agreement with X Co.because he has no authority to enter into shipping agreements. 
E) none of the above

Question 3

How is the scope of an agent's authority to enter into contracts for a principal extended so as to permit the agent to do the job which the principal hired him or her to do?

Accepted Answer

Although agency contracts usually state

Question 4

Franchising agreements are typically standard form contracts prepared by the franchisor and presented to the franchisee on a take-it-or-leave-it basis.

Accepted Answer

A) True 
 B)False

Question 5

Name three occasions in the absence of an employment relationship when an agent's authority may be terminated.

Accepted Answer

In the absence of evidence of an employm

Question 6

Pursuant to some franchise agreements,a potential source of profit to the franchisor is derived from exclusive supply arrangements.

Accepted Answer

A) True 
 B)False

Question 7

Ratification of a contract by a principal serves to terminate the contract with a third party made by the principal's agent.

Accepted Answer

A) True 
 B)False

Question 8

Explain for each of the following statements whether the agent has liability to the third party.
a.The agent enters into a contract on behalf of its principal with a third party.Unknown to the agent,its principal had died two months previously.
b.The agent acts on behalf of an undisclosed principal.The agent acting on behalf of the principal enters into a contract with the third party.The contract is made in the agent's name,and the circumstances surrounding the contract show that the agent categorically described himself as a principal throughout the negotiations.
c.The agent enters into a contract with the third party but represents himself neither as a principal nor an agent.
d.he agent enters into a contact with the third party.Prior to entering the contract,the agent advised the third party that he was acting on behalf of a principal that did not wish to disclose its name at the present time.

Accepted Answer

The agent is liable to the third party i

Question 9

Does the franchisor have a fiduciary duty towards the franchisee? How about the other way around?

Accepted Answer

In general,there is no fiduciary duty be

Question 10

Where a person who is really acting as agent for another does not tell this to a third party and enters into a contract with the third party,the third party

Accepted Answer

A) can only sue the agent,whether or not the principal is disclosed. 
B) must decide whether to sue the agent or the principal. 
C) can argue a mistake rendering the contract voidable at the third party's option. 
D) can only sue the undisclosed principal,but not the agent. 
E) must attempt to limit its losses by rescinding the contract. 
A) can only sue the agent,whether or not the principal is disclosed. 
B) must decide whether to sue the agent or the principal. 
C) can argue a mistake rendering the contract voidable at the third party's option. 
D) can only sue the undisclosed principal,but not the agent. 
E) must attempt to limit its losses by rescinding the contract.

Question 11

Barney explains to Mrs.Adams that the contract is an option on her land,that he is an agent,and that the principal wants to remain undisclosed at the present time.If Mrs.Adams signs the option agreement,can it be enforced against her even though the principal is not named and the agent fails to sign?

Accepted Answer

A) No,it cannot,because an agent always lacks the authority to bind an undisclosed principal. 
B) No,it cannot; since this agreement is for interest in land,it must have all the essential terms of a written contract. 
C) Yes,it can,because the agent clearly identified himself. 
D) Yes,it can,since only the charged party needs to sign the agreement. 
E) No,it cannot,since the names of both parties are needed on a written contract. 
A) No,it cannot,because an agent always lacks the authority to bind an undisclosed principal. 
B) No,it cannot; since this agreement is for interest in land,it must have all the essential terms of a written contract. 
C) Yes,it can,because the agent clearly identified himself. 
D) Yes,it can,since only the charged party needs to sign the agreement. 
E) No,it cannot,since the names of both parties are needed on a written contract.

Question 12

Only independent contractors,not employees,can be agents.

Accepted Answer

A) True 
 B)False

Question 13

An agency agreement comes to an end when the agent breaches the agreement.

Accepted Answer

A) True 
 B)False

Question 14

In Montreal,Mike represents six different Canadian business firms in the sale and servicing of their products.Mike is

Accepted Answer

A) an independent agent. 
B) a plural employee. 
C) a company representative. 
D) a contingency agent. 
E) a sales and servicing broker. 
A) an independent agent. 
B) a plural employee. 
C) a company representative. 
D) a contingency agent. 
E) a sales and servicing broker.

Question 15

The president of A Co.introduces B to a third party as his vice-president of marketing and sales.In reality,however,A Co.'s president makes it clear to B that he is only the vice-president of marketing and has no authority to make sales.If B now enters into a contract for the sale of A Co.'s goods to the third party,as between A Co.and the third party

Accepted Answer

A) there is no contract because B does not have express authority over sales. 
B) there is a contract because B had apparent or ostensible authority to enter into it. 
C) there is no contract because B can only deal with matters of marketing. 
D) there is no contract because it was not ratified by A Co. 
E) none of the above 
A) there is no contract because B does not have express authority over sales. 
B) there is a contract because B had apparent or ostensible authority to enter into it. 
C) there is no contract because B can only deal with matters of marketing. 
D) there is no contract because it was not ratified by A Co. 
E) none of the above

Question 16

In relation to each of the following statements,identify the way in which the agency relationship has been established.

Accepted Answer

In statement (a),the agency was created

Question 17

A franchisor,Garden Delicious Inc.,has 73 franchised outlets across Canada using the theme "healthy eating." Its Surrey,B.C.,franchisee,Tom Cain,has been adding bagels to the regular "authorized" menu.Garden Delicious Inc.has asked Tom on several occasions to stop,but he has refused,saying that the contract does not specifically prohibit adding items to the menu.Legally speaking,will the franchisor be able to stop this practice?

Accepted Answer

A) Yes,he will,since the franchisor has the money and legal clout to force compliance. 
B) Yes,he will,because there is an implied term that the franchisee is to protect the goodwill and trademarks and trade secrets of the franchisor. 
C) Yes,he will,since this practice will decrease the profits for all franchisees. 
D) No,he won't,since Tom is an independent businessperson,he can manage his business as he sees fit-within the law. 
E) No,he won't,since this practice will set a healthy precedent among the other franchisees. 
A) Yes,he will,since the franchisor has the money and legal clout to force compliance. 
B) Yes,he will,because there is an implied term that the franchisee is to protect the goodwill and trademarks and trade secrets of the franchisor. 
C) Yes,he will,since this practice will decrease the profits for all franchisees. 
D) No,he won't,since Tom is an independent businessperson,he can manage his business as he sees fit-within the law. 
E) No,he won't,since this practice will set a healthy precedent among the other franchisees.

Question 18

None of the contracts between the six independent manufacturer's agents and the ABC Company speak as to how the contracts can be terminated.All six agents have been doing a splendid job for several years in selling ABC's products.However,last week,ABC's board of directors decided to turn the selling function over to the company's own employees.This is to be completed within the next 30 days.Can the company's agency contracts with the independent agents be legally terminated,and if so,how?

Accepted Answer

A) Yes,they can be terminated by failing to renew the contracts upon expiration. 
B) Yes,they can be terminated by declaring the company's sales project to be at an end. 
C) No,they cannot be terminated without a breach and the resulting severance damages. 
D) Yes,they can be terminated,since a reasonable time has passed for each agency contract. 
E) Yes,they can be terminated by simply having the principal give notice that it wishes the relationship to come to an end; no other explanation is required. 
A) Yes,they can be terminated by failing to renew the contracts upon expiration. 
B) Yes,they can be terminated by declaring the company's sales project to be at an end. 
C) No,they cannot be terminated without a breach and the resulting severance damages. 
D) Yes,they can be terminated,since a reasonable time has passed for each agency contract. 
E) Yes,they can be terminated by simply having the principal give notice that it wishes the relationship to come to an end; no other explanation is required.

Question 19

The major difference between the franchisee-franchisor relationship and the agent-principal relationship is that only

Accepted Answer

A) the franchisee relationship permits a business to expand rapidly. 
B) principals employ the assistance of others in order to reach out to a wider public. 
C) franchisors give authorization for entering into contracts. 
D) agents market the principal's products. 
E) franchisees contract with members of the public on their own behalf,not as agent for the franchisor. 
A) the franchisee relationship permits a business to expand rapidly. 
B) principals employ the assistance of others in order to reach out to a wider public. 
C) franchisors give authorization for entering into contracts. 
D) agents market the principal's products. 
E) franchisees contract with members of the public on their own behalf,not as agent for the franchisor.

Question 20

A Co.develops land.From time to time,it has used B,an independent contractor,as its agent to help it buy land.In fact,A Co.even lets B keep an office in its head offices,and on occasion C,a third party,has seen B's office when he has had meetings at A Co.If B enters into an agreement of purchase and sale on behalf of A Co.to purchase C's land

Accepted Answer

A) there will be no agreement because B does not have the necessary authority. 
B) there will be no agreement because A Co.did not ratify the contract. 
C) there will be an agreement because B had express authority to enter into it. 
D) there will be an agreement between A Co.and C because A Co.is estopped from arguing that B did not have the authority to enter into it. 
E) none of the above 
A) there will be no agreement because B does not have the necessary authority. 
B) there will be no agreement because A Co.did not ratify the contract. 
C) there will be an agreement because B had express authority to enter into it. 
D) there will be an agreement between A Co.and C because A Co.is estopped from arguing that B did not have the authority to enter into it. 
E) none of the above

Exam 17: Agency and Franchising

A franchisor has a fiduciary duty towards the franchisee.

X Co.in Montreal retains Y as its purchasing agent to purchase goods from all over the world.If Y,having purchased goods in England,enters into an agreement with a shipping company to ship the goods to Montreal

How is the scope of an agent's authority to enter into contracts for a principal extended so as to permit the agent to do the job which the principal hired him or her to do?

Franchising agreements are typically standard form contracts prepared by the franchisor and presented to the franchisee on a take-it-or-leave-it basis.

Name three occasions in the absence of an employment relationship when an agent's authority may be terminated.

Pursuant to some franchise agreements,a potential source of profit to the franchisor is derived from exclusive supply arrangements.

Ratification of a contract by a principal serves to terminate the contract with a third party made by the principal's agent.

Does the franchisor have a fiduciary duty towards the franchisee? How about the other way around?

Where a person who is really acting as agent for another does not tell this to a third party and enters into a contract with the third party,the third party

Only independent contractors,not employees,can be agents.

An agency agreement comes to an end when the agent breaches the agreement.

In Montreal,Mike represents six different Canadian business firms in the sale and servicing of their products.Mike is

In relation to each of the following statements,identify the way in which the agency relationship has been established.

The major difference between the franchisee-franchisor relationship and the agent-principal relationship is that only

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

Filters