Question 1

Explain how the principle of estoppel can be important in an agency relationship.

Accepted Answer

The authority of the agent to bind the p

Question 2

Which one of the following statements is correct with respect to sole proprietorships?

Accepted Answer

A)  The sole proprietor has limited liability. 
B)  The sole proprietor need not adhere to any licensing and government regulations. 
C)  The sole proprietor must consult with the other owners before making any major decisions regarding the business. 
D)  The sole proprietor has the same extent of liability as a shareholder. 
E)  The sole proprietor is responsible for the torts committed by an employee that take place during the course of business. 
A)  The sole proprietor has limited liability. 
B)  The sole proprietor need not adhere to any licensing and government regulations. 
C)  The sole proprietor must consult with the other owners before making any major decisions regarding the business. 
D)  The sole proprietor has the same extent of liability as a shareholder. 
E)  The sole proprietor is responsible for the torts committed by an employee that take place during the course of business.

Question 3

Discuss the principle of ratification. In your discussion, look at any injustice caused by its operation and limitations on its availability.

Accepted Answer

Ratification of a contract takes place w

Question 4

Limited liability can be the most significant disadvantage of the sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 5

A principal whose identity is concealed from the third parties with whom the agent is dealing is known as an undisclosed principal.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is considered to be a separate legal person in law?

Accepted Answer

A)  A sole proprietorship 
B)  A partnership 
C)  A corporation 
D)  An agency 
E)  A professional practice 
A)  A sole proprietorship 
B)  A partnership 
C)  A corporation 
D)  An agency 
E)  A professional practice

Question 7

Three students in a business faculty created a computer program that compared various retirement plans. They decided to go into business together to offer their services directly to the public. After doing a feasibility study, they felt there were profits to be made. For tax reasons, they decided not to incorporate. Each contributed $15,000 and Wayne, one of the three, contributed a computer. In a short written agreement, they agreed that all three would be actively involved in the management of the business, that all three would work to update the program, that they would share the profits equally, and that they should not be viewed as partners. Based on these facts, which of the following statements is true?

Accepted Answer

A)  They are not partners because they do not share profits in proportion to their capital contributions. 
B)  They would be considered partners despite their express intention to the contrary in their agreement. 
C)  They are not partners unless they realize a profit from their enterprise. 
D)  If one partner dies, the partnership would be dissolved even if they state otherwise in their agreement. 
E)  If Wayne were to go bankrupt, the partnership would be dissolved even if they state otherwise in their agreement. 
A)  They are not partners because they do not share profits in proportion to their capital contributions. 
B)  They would be considered partners despite their express intention to the contrary in their agreement. 
C)  They are not partners unless they realize a profit from their enterprise. 
D)  If one partner dies, the partnership would be dissolved even if they state otherwise in their agreement. 
E)  If Wayne were to go bankrupt, the partnership would be dissolved even if they state otherwise in their agreement.

Question 8

What is the effect of a partnership agreement with a term making it clear that each partner will only be responsible for 1/3 of the debts and obligations?

Accepted Answer

A partnership agreement cannot change th

Question 9

Which of the following statements is true with regard to an agent's duties?

Accepted Answer

A)  A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B)  An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C)  An agent cannot act for two principals even with the knowledge and consent of those principals. 
D)  An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E)  An agent need not disclose all relevant information to the principal. 
A)  A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B)  An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C)  An agent cannot act for two principals even with the knowledge and consent of those principals. 
D)  An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E)  An agent need not disclose all relevant information to the principal.

Question 10

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

Accepted Answer

A)  the reasonable agent theory. 
B)  agency by express agreement. 
C)  the failure of the principal to register the agency agreement. 
D)  the agent's apparent authority. 
E)  fiduciary duty. 
A)  the reasonable agent theory. 
B)  agency by express agreement. 
C)  the failure of the principal to register the agency agreement. 
D)  the agent's apparent authority. 
E)  fiduciary duty.

Question 11

The only situation where an agent can be sued by a third party is where he has gone beyond his apparent and actual authority.

Accepted Answer

A) True 
 B)False

Question 12

Explain how the authority of an agent may be terminated.

Accepted Answer

Such authority is usually terminated by

Question 13

With respect to the formation of agency by estoppel, which of the following statements is true?

Accepted Answer

A)  The issue of apparent authority arises only if a person acts as an agent when he has express or implied authority. 
B)  When a third party suspects that the agent he deals with has no authority, there is no obligation on him to question the agent's alleged authority. 
C)  When a party represents, by words or conduct, that someone is his agent, that party can later deny liability on a contract made for him by that agent on the basis that no express agency agreement existed. 
D)  When a party terminates an express agency agreement with his agent and notifies third parties with whom that agent normally dealt, that party will be liable on a contract made for him by that "fired" agent. 
E)  If the principal tells an agent specifically not to sell something and the agent, in disobedience of those instructions, sells it anyway, the principal may be bound by the contract because of estoppel. 
A)  The issue of apparent authority arises only if a person acts as an agent when he has express or implied authority. 
B)  When a third party suspects that the agent he deals with has no authority, there is no obligation on him to question the agent's alleged authority. 
C)  When a party represents, by words or conduct, that someone is his agent, that party can later deny liability on a contract made for him by that agent on the basis that no express agency agreement existed. 
D)  When a party terminates an express agency agreement with his agent and notifies third parties with whom that agent normally dealt, that party will be liable on a contract made for him by that "fired" agent. 
E)  If the principal tells an agent specifically not to sell something and the agent, in disobedience of those instructions, sells it anyway, the principal may be bound by the contract because of estoppel.

Question 14

Discuss the extent of the obligations of the agent to the principal based on his fiduciary duty.

Accepted Answer

The agent must disclose information he i

Question 15

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

Accepted Answer

This statement is accurate. A

Question 16

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Accepted Answer

A) True 
 B)False

Question 17

Explain under what circumstances the third party can be sued by the principal in the event of default.

Accepted Answer

When the agent has acted withi

Question 18

Which of the following is incorrect with respect to the creation of a partnership?

Accepted Answer

A)  An important indication as to whether a partnership exists is the sharing of the profits of the business activity. 
B)  The business activity must be continuing in order for it to indicate the existence of a partnership. 
C)  A partnership can only be created with the consent of the parties. 
D)  The common method of creating a partnership is by agreement. 
E)  The duties and obligations of partners to each other can be modified by agreement. 
A)  An important indication as to whether a partnership exists is the sharing of the profits of the business activity. 
B)  The business activity must be continuing in order for it to indicate the existence of a partnership. 
C)  A partnership can only be created with the consent of the parties. 
D)  The common method of creating a partnership is by agreement. 
E)  The duties and obligations of partners to each other can be modified by agreement.

Question 19

Utmost good faith is another term for a business's reputation and ongoing relations with customers.

Accepted Answer

A) True 
 B)False

Question 20

Explain under what circumstances a principal can be held liable for torts committed by an agent.

Accepted Answer

A principal can be held liable

Explain how the principle of estoppel can be important in an agency relationship.

Which one of the following statements is correct with respect to sole proprietorships?

Discuss the principle of ratification. In your discussion, look at any injustice caused by its operation and limitations on its availability.

Limited liability can be the most significant disadvantage of the sole proprietorship.

A principal whose identity is concealed from the third parties with whom the agent is dealing is known as an undisclosed principal.

Which of the following is considered to be a separate legal person in law?

What is the effect of a partnership agreement with a term making it clear that each partner will only be responsible for 1/3 of the debts and obligations?

Which of the following statements is true with regard to an agent's duties?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

The only situation where an agent can be sued by a third party is where he has gone beyond his apparent and actual authority.

Explain how the authority of an agent may be terminated.

With respect to the formation of agency by estoppel, which of the following statements is true?

Discuss the extent of the obligations of the agent to the principal based on his fiduciary duty.

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Explain under what circumstances the third party can be sued by the principal in the event of default.

Which of the following is incorrect with respect to the creation of a partnership?

Utmost good faith is another term for a business's reputation and ongoing relations with customers.

Explain under what circumstances a principal can be held liable for torts committed by an agent.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters

Exam 10: Agency and Partnership

Explain how the principle of estoppel can be important in an agency relationship.

Which one of the following statements is correct with respect to sole proprietorships?

Discuss the principle of ratification. In your discussion, look at any injustice caused by its operation and limitations on its availability.

Limited liability can be the most significant disadvantage of the sole proprietorship.

A principal whose identity is concealed from the third parties with whom the agent is dealing is known as an undisclosed principal.

Which of the following is considered to be a separate legal person in law?

What is the effect of a partnership agreement with a term making it clear that each partner will only be responsible for 1/3 of the debts and obligations?

Which of the following statements is true with regard to an agent's duties?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

The only situation where an agent can be sued by a third party is where he has gone beyond his apparent and actual authority.

Explain how the authority of an agent may be terminated.

With respect to the formation of agency by estoppel, which of the following statements is true?

Discuss the extent of the obligations of the agent to the principal based on his fiduciary duty.

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

The fiduciary duty of an agent refers to his obligations to act within the limits of his actual or apparent authority.

Explain under what circumstances the third party can be sued by the principal in the event of default.

Which of the following is incorrect with respect to the creation of a partnership?

Utmost good faith is another term for a business's reputation and ongoing relations with customers.

Explain under what circumstances a principal can be held liable for torts committed by an agent.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters