Question 1

Which of the following is true regarding situations in which an agent enters into a contract without authority?

Accepted Answer

A)  The principal is not bound nor is the agent bound. 
B)  The principal is bound and the agent may be personally liable. 
C)  The principal is not bound, but the agent may personally liable. 
D)  Neither the principal nor the agent is bound if the contract is oral; but if the contract is written, both the principal and agent are bound. 
A)  The principal is not bound nor is the agent bound. 
B)  The principal is bound and the agent may be personally liable. 
C)  The principal is not bound, but the agent may personally liable. 
D)  Neither the principal nor the agent is bound if the contract is oral; but if the contract is written, both the principal and agent are bound.

Question 2

An agent may bind the principal due to the agent's ________ authority.

Accepted Answer

A)  express 
B)  implied 
C)  apparent 
D)  express, implied, or apparent 
A)  express 
B)  implied 
C)  apparent 
D)  express, implied, or apparent

Question 3

Which of the following is not one of the factors the law looks at in distinguishing between employees and independent contractors?

Accepted Answer

A)  The amount of experience of the worker 
B)  Whether the work is usually performed by a specialist without supervision 
C)  Whether the worker is paid hourly or by the job 
D)  The degree of skill the work requires 
A)  The amount of experience of the worker 
B)  Whether the work is usually performed by a specialist without supervision 
C)  Whether the worker is paid hourly or by the job 
D)  The degree of skill the work requires

Question 4

The most basic legal characteristic of the employer-employee relationship is that the employer has the right to

Accepted Answer

A)  deduct taxes 
B)  control the conduct of the employee 
C)  provide health care 
D)  deduct taxes, control the conduct of the employee, and provide health care 
A)  deduct taxes 
B)  control the conduct of the employee 
C)  provide health care 
D)  deduct taxes, control the conduct of the employee, and provide health care

Question 5

Maureen owns a business that makes kites. Maureen's agent Bob entered into an agreement with Alice to purchase some land for a new kite factory. Maureen's agency relationship with Bob was not memorialized by any writing. The day after Bob signs the papers finalizing the sale,Maureen learned of the purchase,was furious with Bob,and said that she wanted out of the deal. Assuming that Bob was legally considered the agent of Maureen in making the purchase,which of the following is Maureen's best argument?

Accepted Answer

A)  That the agency agreement with Bob was not in writing and that under the equal dignities rule she should not be bound. 
B)  That agency agreements may not extend to the purchase of land. 
C)  That under the exclusion principle, Bob was not authorized to purchase land unless expressly authorized by Maureen. 
D)  That she did not need land and that therefore she should not be bound because Bob was mistaken. 
A)  That the agency agreement with Bob was not in writing and that under the equal dignities rule she should not be bound. 
B)  That agency agreements may not extend to the purchase of land. 
C)  That under the exclusion principle, Bob was not authorized to purchase land unless expressly authorized by Maureen. 
D)  That she did not need land and that therefore she should not be bound because Bob was mistaken.

Question 6

Once an agent is given express authority,he or she also has _______ authority to do whatever is reasonable to complete the task he or she has been instructed to undertake.

Accepted Answer

A)  implied 
B)  absolute 
C)  limited 
D)  contractual 
A)  implied 
B)  absolute 
C)  limited 
D)  contractual

Question 7

In agreeing to act on behalf of the principal,the agent becomes a fiduciary.

Accepted Answer

A) True 
 B)False

Question 8

The fact that leased workers are on the payroll of an employment agency does not preclude them from being considered employees of the company at which they are actually working on a joint employer theory.

Accepted Answer

A) True 
 B)False

Question 9

Molly wants to buy a vacant lot that is for sale in her neighborhood. The problem is that she had a skirmish with the current owner,Ben,over his dog barking at all hours of the night. Molly asks Sam if he will purchase the lot on her behalf without telling Ben that she will be the true owner. Sam agrees and reaches an agreement with Ben. A few months after the purchase,Molly begins to do some work on the lot. Ben sees her and asks what she is doing. Molly tells him that she was the true purchaser. Ben becomes furious and yells at her that he will have the sale rescinded and sue both Molly and Sam for fraud. What will be the likely result if Ben sues Molly and Sam?

Accepted Answer

Ben will lose as to both Molly

Question 10

A master-servant agency is a type of agency that is illegal.

Accepted Answer

A) True 
 B)False

Question 11

Sam is an employee of Binky,Inc.While delivering a truckload of binkies to a local retailer,Sam decided to stop at his bank to deposit his paycheck.The bank is three blocks from the retailer and it takes approximately 15 minutes to deposit a check.While Sam is in the bank,the truck rolled down the street because Sam negligently forgot to set the parking brake.The truck crashed through the window of Market,killing two people and causing $500,000 in damage. Discuss the issues involved in determining whether Binky,Inc.is liable for the damages at issue. If Binky,Inc.is liable,can it recover against Sam for the damages?

Accepted Answer

Market would have to prove that Sam shou

Question 12

Which of the following is not usually considered an independent contractor?

Accepted Answer

A)  A delivery driver working for a delivery service 
B)  A lawyer working for a client 
C)  A plumber working for a homeowner 
D)  An architect working for a developer 
A)  A delivery driver working for a delivery service 
B)  A lawyer working for a client 
C)  A plumber working for a homeowner 
D)  An architect working for a developer

Question 13

The Telephone Records and Privacy Protection Act of 2006 makes it illegal for a person to use fraud to obtain individual customer billing records and other customer information from telephone companies.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is false regarding an agency relationship?

Accepted Answer

A)  The most common form of agency relationship is the employer-employee relationship. 
B)  An agent may not be in independent contractor. 
C)  An agency agreement may be implied. 
D)  Agency may be established by estoppel. 
A)  The most common form of agency relationship is the employer-employee relationship. 
B)  An agent may not be in independent contractor. 
C)  An agency agreement may be implied. 
D)  Agency may be established by estoppel.

Question 15

Which of the following is true regarding whether an independent contractor is an agent of a principal?

Accepted Answer

A)  An independent contractor is always an agent of the principal. 
B)  An independent contractor, by definition, is not an agent of the principal. 
C)  An independent contractor may or may not be an agent generally depending on whether the independent contractor has authority to enter into contracts on behalf of the hiring party. 
D)  An independent contractor is an agent only if the hiring party is a merchant. 
A)  An independent contractor is always an agent of the principal. 
B)  An independent contractor, by definition, is not an agent of the principal. 
C)  An independent contractor may or may not be an agent generally depending on whether the independent contractor has authority to enter into contracts on behalf of the hiring party. 
D)  An independent contractor is an agent only if the hiring party is a merchant.

Question 16

The principal has the right to demand reimbursement from the agent for any damages paid to a third party because of an agent's negligence.

Accepted Answer

A) True 
 B)False

Question 17

The Electronic Signatures in Global and National Commerce Act provides that contracts executed by electronic agents are invalid.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true regarding express authority?

Accepted Answer

A)  It may be given by the principal's actual words but not by action. 
B)  It may be given by written contract only. 
C)  It may be given by the principal's actual words and also by an action that indicates the principal's consent. 
D)  It may be given by action but only after a contract of agency has been signed. 
A)  It may be given by the principal's actual words but not by action. 
B)  It may be given by written contract only. 
C)  It may be given by the principal's actual words and also by an action that indicates the principal's consent. 
D)  It may be given by action but only after a contract of agency has been signed.

Question 19

A principal may be held liable for the torts of a(n)________ only in extraordinary circumstances,usually involving highly dangerous acts or nondelegable duties.

Accepted Answer

A)  agent 
B)  servant 
C)  employee 
D)  independent contractor 
A)  agent 
B)  servant 
C)  employee 
D)  independent contractor

Question 20

An independent contractor is also considered an employee of the person for whom work is being done.

Accepted Answer

A) True 
 B)False

Exam 5: Agency

Which of the following is true regarding situations in which an agent enters into a contract without authority?

An agent may bind the principal due to the agent's ________ authority.

Which of the following is not one of the factors the law looks at in distinguishing between employees and independent contractors?

The most basic legal characteristic of the employer-employee relationship is that the employer has the right to

Once an agent is given express authority,he or she also has _______ authority to do whatever is reasonable to complete the task he or she has been instructed to undertake.

In agreeing to act on behalf of the principal,the agent becomes a fiduciary.

The fact that leased workers are on the payroll of an employment agency does not preclude them from being considered employees of the company at which they are actually working on a joint employer theory.

A master-servant agency is a type of agency that is illegal.

Which of the following is not usually considered an independent contractor?

The Telephone Records and Privacy Protection Act of 2006 makes it illegal for a person to use fraud to obtain individual customer billing records and other customer information from telephone companies.

Which of the following is false regarding an agency relationship?

Which of the following is true regarding whether an independent contractor is an agent of a principal?

The principal has the right to demand reimbursement from the agent for any damages paid to a third party because of an agent's negligence.

The Electronic Signatures in Global and National Commerce Act provides that contracts executed by electronic agents are invalid.

Which of the following is true regarding express authority?

A principal may be held liable for the torts of a(n)________ only in extraordinary circumstances,usually involving highly dangerous acts or nondelegable duties.

An independent contractor is also considered an employee of the person for whom work is being done.

law, value creation, and risk management

Ethics ant the law

Courts, sources of law, and dispute resolution

Constitutional bases for business regulation

Administrative Law

Contracts

sales,licensing,and e-commerce

Torts and Privacy protection

product liability

Intellectual property

The employment agreement

civil rights and employment discrimination

Criminal law

Environmental law

Antitrust

Consumer Protection

real property and land use

Forms of business organizations

Directors, Officers, and Controlling Shareholders

Public and Private Offerings of Securities

Securities Fraud and insider trading

Debtor-Creditor Relations and Bankruptcy

International Business

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