Question 1

If conflicts arise with the agent's own interests or with the interests of those with whom he or she is connected,disclosure to all persons affected is unnecessary.

Accepted Answer

A) True 
 B)False

Question 2

Why is the purchase of a franchise not a guarantee of success for the franchisee?

Accepted Answer

While purchasing a franchise may better

Question 3

A power of attorney is a special type of express agency agreement authorizing the agent to sign documents on behalf of the principal.

Accepted Answer

A) True 
 B)False

Question 4

For "selling-off-price-list," Vera was terminated from her position as sales rep for the Crouger Co.Two months after the termination,Vera is still sending in orders from her former customers.This raises the issue of

Accepted Answer

A) whether Vera was really terminated or not. 
B) whether notification was given to customers. 
C) whether the company is estopped from accepting liability. 
D) whether there is "holding out" by Crouger Co. 
E) who gets the commissions. 
A) whether Vera was really terminated or not. 
B) whether notification was given to customers. 
C) whether the company is estopped from accepting liability. 
D) whether there is "holding out" by Crouger Co. 
E) who gets the commissions.

Question 5

A franchise agreement most likely gives the franchisee the right to

Accepted Answer

A) locate and design their own business premises. 
B) demand direct financial assistance from the franchisor. 
C) use their own accounting,inventory control,and purchasing systems. 
D) franchisee protection legislation. 
E) trademarks,trade names,and logos belonging to the franchisor. 
A) locate and design their own business premises. 
B) demand direct financial assistance from the franchisor. 
C) use their own accounting,inventory control,and purchasing systems. 
D) franchisee protection legislation. 
E) trademarks,trade names,and logos belonging to the franchisor.

Question 6

If an agent is liable for fraudulent misrepresentation in making a contract,the third party may rescind the contract.And if the agent was acting within his apparent authority,the third party may sue the principal as well as the agent for

Accepted Answer

A) conspiracy to defraud. 
B) warranty of authority. 
C) breach of contract. 
D) agency negligence. 
E) tort of deceit. 
A) conspiracy to defraud. 
B) warranty of authority. 
C) breach of contract. 
D) agency negligence. 
E) tort of deceit.

Question 7

What does it mean when we say that an agent is the fiduciary of his principal?

Accepted Answer

This means that there is a fiduciary rel

Question 8

How is the agency relationship used in a corporation and a partnership?

Accepted Answer

Since a corporation is an artificial "pe

Question 9

Edward is the president of Jones and Sons Ltd.,Wholesalers (J&S).He recently hired George Cummings as his national marketing and advertising manager.Yesterday,Edward took George to a convention where,after a few drinks,he introduced George to the president of Sears as his national sales manager.The next day,after his hangover had subsided,Edward called the president of Sears and told him the truth about George.A couple of days later,George entered into a contract with Sears under which J&S sold 2 million dollars worth of furniture to Sears.J&S now refuses to honour the contract.If Sears sues J&S on the contract

Accepted Answer

A) Sears will lose because the contract is unconscionable. 
B) Sears will lose,but will have a quantum meruit claim. 
C) Sears will win because Edward held out George as the national sales manager of J&S. 
D) Sears will lose because final acceptance of the contract had to come from J&S. 
E) Sears will lose because its president knew that George was only the national marketing and advertising manager of J&S. 
A) Sears will lose because the contract is unconscionable. 
B) Sears will lose,but will have a quantum meruit claim. 
C) Sears will win because Edward held out George as the national sales manager of J&S. 
D) Sears will lose because final acceptance of the contract had to come from J&S. 
E) Sears will lose because its president knew that George was only the national marketing and advertising manager of J&S.

Question 10

Agency by estoppel goes hand in hand with the apparent or ostensible authority of an agent to enter into the contract.

Accepted Answer

A) True 
 B)False

Question 11

Joe is appointed to sell a yacht on explicit instructions from the owner.Joe is acting with

Accepted Answer

A) apparent authority. 
B) unilateral authority. 
C) promissory reliance. 
D) actual authority. 
E) mutual dependence. 
A) apparent authority. 
B) unilateral authority. 
C) promissory reliance. 
D) actual authority. 
E) mutual dependence.

Question 12

Although they are similar,agency and franchising have important differences.One of the most significant of these is that

Accepted Answer

A) franchisees are not in an agency relationship with the franchisor. 
B) franchising does not permit a business to expand rapidly. 
C) in agency,the principal does not invoke the assistance of the agent to reach out to the wider public. 
D) independent agents do not market the principal's products like franchisees market the franchisor's products. 
E) agents do not have any legal relationship with the principal. 
A) franchisees are not in an agency relationship with the franchisor. 
B) franchising does not permit a business to expand rapidly. 
C) in agency,the principal does not invoke the assistance of the agent to reach out to the wider public. 
D) independent agents do not market the principal's products like franchisees market the franchisor's products. 
E) agents do not have any legal relationship with the principal.

Question 13

Is it legally permissible for an agent to work for two principals; such as for both the seller and the buyer in a real estate transaction?

Accepted Answer

The law permits this as long as both par

Question 14

If my son takes a luxury cruise without my permission and has the company send me the bill and I pay,I create the impression that I will always pay for this type of conduct.If I fail to inform the company that I will not pay again,this refers to the idea of

Accepted Answer

A) false authorization. 
B) agent inducement. 
C) estoppel. 
D) mutual reliance. 
E) all of the above 
A) false authorization. 
B) agent inducement. 
C) estoppel. 
D) mutual reliance. 
E) all of the above

Question 15

Happy Burgers is a successful fast food restaurant.Having decided to expand its operation,Happy Burgers decides to approach independent business people with the intention of licensing its operation to them,finding them a location for a Happy Burgers restaurant,setting up the restaurant,and training them in its operation.In return,they will pay Happy Burgers a royalty fee based on a percentage of their gross sales.This arrangement is an example of

Accepted Answer

A) an agreement of purchase and sale. 
B) a license agreement. 
C) a franchise agreement. 
D) an agency agreement. 
E) a royalties agreement. 
A) an agreement of purchase and sale. 
B) a license agreement. 
C) a franchise agreement. 
D) an agency agreement. 
E) a royalties agreement.

Question 16

Zelda is a Hollywood movie star wanting to buy recreational property.She describes her specifications to Craig and asks him to make an offer to purchase if he finds a suitable property.She asks him not to divulge her identity.Craig finds an ideal property and makes a written offer in his own name to purchase the property for $500 000.00.The vendor signs an acceptance.Zelda suffers a financial setback and refuses to go through with the contract.Whom can the vendor sue?

Accepted Answer

A) Craig only 
B) Zelda or Craig 
C) Zelda only 
D) Zelda and Craig 
E) neither Zelda nor Craig 
A) Craig only 
B) Zelda or Craig 
C) Zelda only 
D) Zelda and Craig 
E) neither Zelda nor Craig

Question 17

A franchisor guarantees that its franchisee will always succeed.

Accepted Answer

A) True 
 B)False

Question 18

X Co.owns land all over downtown Toronto.From time to time,X Co.has used John Jones as its agent to sell land that it owns.X Co.hires John and tells him it wants to sell a downtown property located on Front Street.It instructs John to list the property for $1 million,but that it will take $900 000.00.John has a friend,Mary,who is interested in buying the Front Street property,but rather than listing it at $1 million,he simply tells Mary "For $900 000.00 it's yours," and she agrees.John,having effected the sale,now wants to be paid his commission by X Co.In this situation

Accepted Answer

A) John has apparent or ostensible authority to sell the land. 
B) John has breached his fiduciary duty owed to X Co. 
C) X Co.can refuse to pay John his commission. 
D) there is an agreement of purchase and sale between X Co.and Mary for the Front Street property. 
E) all of the above 
A) John has apparent or ostensible authority to sell the land. 
B) John has breached his fiduciary duty owed to X Co. 
C) X Co.can refuse to pay John his commission. 
D) there is an agreement of purchase and sale between X Co.and Mary for the Front Street property. 
E) all of the above

Question 19

Why should an agent representing a principal always make it clear to a third party that the agent is representing a principal,and not acting on the agent's own behalf?

Accepted Answer

If the agent does not make it clear that

Question 20

Albert is friends with Robert,the president of A.Co.When Albert hears about a lucrative deal with Y Co.that would benefit A Co.,he immediately enters into a contract with Y Co.,telling Y Co.that he is A Co.'s agent.When Albert tells Robert what he has done,Robert telephones Y.Co.and confirms the contract.In this case,as between A Co.and Y Co.

Accepted Answer

A) there is no contract because Albert is an independent contractor. 
B) there is a contract because Robert ratified it on behalf of A Co. 
C) there is no contract because Albert had no authority to enter into it for A Co. 
D) there is a contract because Y Co.ratified it. 
E) Y Co.is estopped from arguing that there is no contract. 
A) there is no contract because Albert is an independent contractor. 
B) there is a contract because Robert ratified it on behalf of A Co. 
C) there is no contract because Albert had no authority to enter into it for A Co. 
D) there is a contract because Y Co.ratified it. 
E) Y Co.is estopped from arguing that there is no contract.

Exam 17: Agency and Franchising

If conflicts arise with the agent's own interests or with the interests of those with whom he or she is connected,disclosure to all persons affected is unnecessary.

Why is the purchase of a franchise not a guarantee of success for the franchisee?

A power of attorney is a special type of express agency agreement authorizing the agent to sign documents on behalf of the principal.

For "selling-off-price-list," Vera was terminated from her position as sales rep for the Crouger Co.Two months after the termination,Vera is still sending in orders from her former customers.This raises the issue of

A franchise agreement most likely gives the franchisee the right to

If an agent is liable for fraudulent misrepresentation in making a contract,the third party may rescind the contract.And if the agent was acting within his apparent authority,the third party may sue the principal as well as the agent for

What does it mean when we say that an agent is the fiduciary of his principal?

How is the agency relationship used in a corporation and a partnership?

Agency by estoppel goes hand in hand with the apparent or ostensible authority of an agent to enter into the contract.

Joe is appointed to sell a yacht on explicit instructions from the owner.Joe is acting with

Although they are similar,agency and franchising have important differences.One of the most significant of these is that

Is it legally permissible for an agent to work for two principals; such as for both the seller and the buyer in a real estate transaction?

If my son takes a luxury cruise without my permission and has the company send me the bill and I pay,I create the impression that I will always pay for this type of conduct.If I fail to inform the company that I will not pay again,this refers to the idea of

A franchisor guarantees that its franchisee will always succeed.

Why should an agent representing a principal always make it clear to a third party that the agent is representing a principal,and not acting on the agent's own behalf?

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

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