Question 1

If an agent breaches his duty to his principal, his principal can sue the agent successfully for

Accepted Answer

A)  breach of warranty of authority. 
B)  breach of the agency agreement. 
C)  breach of agency act. 
D)  wrongful representation. 
E)  the tort of deceit. 
A)  breach of warranty of authority. 
B)  breach of the agency agreement. 
C)  breach of agency act. 
D)  wrongful representation. 
E)  the tort of deceit.

Question 2

If you hire Gnowsky to act as your agent, which of the following is true with regard to the duties he owes to you?

Accepted Answer

A)  Gnowsky need not use reasonable care, skill, and diligence in his service to you. 
B)  Even when Gnowsky is acting as your agent, he need not put your interest above his own. 
C)  An agent may delegate his authority without the authorization of his principal. 
D)  His failure to obey you and to act within the authority given him would allow you to sue him for breach of contract. 
E)  Gnowsky need not tell you everything relevant to his task that a reasonable person would consider might affect your decision making. 
A)  Gnowsky need not use reasonable care, skill, and diligence in his service to you. 
B)  Even when Gnowsky is acting as your agent, he need not put your interest above his own. 
C)  An agent may delegate his authority without the authorization of his principal. 
D)  His failure to obey you and to act within the authority given him would allow you to sue him for breach of contract. 
E)  Gnowsky need not tell you everything relevant to his task that a reasonable person would consider might affect your decision making.

Question 3

The partners can change the terms of their responsibilities to each other in the partnership agreement, but cannot change their obligations to third parties.

Accepted Answer

A) True 
 B)False

Question 4

Distinguish between an agent and an employee.

Accepted Answer

An employee performs work under the cont

Question 5

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

Accepted Answer

A) True 
 B)False

Question 6

Explain what is meant by an "enduring power of attorney."

Accepted Answer

The power to act as

Question 7

Chuck, Howard, and Ben decide to go into a business venture, developing and distributing educational software. For tax reasons, they do not incorporate. Each contributes $10,000, and Howard also contributes a truck and his programming expertise. They agree that all three will be actively involved in the day-to-day management of the business. To determine their rights and obligations, they enter into a one-page agreement that provides only that each of Chuck, Howard, and Ben is to get 33-1/3% of the profits and also specifically states that they are not to be viewed as partners. Based on these facts, which of the following statements is true?

Accepted Answer

A)  Chuck, Howard, and Ben will not be considered partners because of their express intention in their agreement. 
B)  Chuck, Howard, and Ben are not partners because they do not share profits in proportion to their capital contributions. 
C)  Chuck, Howard, and Ben are not partners because to be partners they must be professionals, such as dentists, lawyers, or doctors. 
D)  Chuck, Howard, and Ben will be considered partners in the eyes of the law because they share profits and are involved in the management of the business. 
E)  Chuck, Howard, and Ben will be considered partners, but someone claiming against the partnership will only be able to collect 33-1/3% from any one partner because of the agreement. 
A)  Chuck, Howard, and Ben will not be considered partners because of their express intention in their agreement. 
B)  Chuck, Howard, and Ben are not partners because they do not share profits in proportion to their capital contributions. 
C)  Chuck, Howard, and Ben are not partners because to be partners they must be professionals, such as dentists, lawyers, or doctors. 
D)  Chuck, Howard, and Ben will be considered partners in the eyes of the law because they share profits and are involved in the management of the business. 
E)  Chuck, Howard, and Ben will be considered partners, but someone claiming against the partnership will only be able to collect 33-1/3% from any one partner because of the agreement.

Question 8

Which of the following is correct with respect to limited partnerships?

Accepted Answer

A)  Limited partnership refers to the fact that no more than five people are allowed to be partners in such partnerships. 
B)  Limited partnership refers to the fact that limited partnerships can only carry on in certain kinds of businesses. 
C)  Limited partnership refers to the fact that some partners have limited liability. 
D)  Limited partnership refers to the fact that some partnerships are only created for a limited period of time. 
E)  Limited partnership refers to the fact that the partnership can only issue common shares. 
A)  Limited partnership refers to the fact that no more than five people are allowed to be partners in such partnerships. 
B)  Limited partnership refers to the fact that limited partnerships can only carry on in certain kinds of businesses. 
C)  Limited partnership refers to the fact that some partners have limited liability. 
D)  Limited partnership refers to the fact that some partnerships are only created for a limited period of time. 
E)  Limited partnership refers to the fact that the partnership can only issue common shares.

Question 9

With regard to liability of partners, which of the following is true?

Accepted Answer

A)  A limited partner has unlimited liability beyond the amount of his initial investment. 
B)  A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication. 
C)  A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner. 
D)  A general partner has limited liability for any loss suffered because of the negligent act (e.g., omission) of one of her partners. 
E)  The partnership, and thus the partners, are liable for any loss suffered because of a tort committed by its employee outside the course of his employment. 
A)  A limited partner has unlimited liability beyond the amount of his initial investment. 
B)  A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication. 
C)  A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner. 
D)  A general partner has limited liability for any loss suffered because of the negligent act (e.g., omission) of one of her partners. 
E)  The partnership, and thus the partners, are liable for any loss suffered because of a tort committed by its employee outside the course of his employment.

Question 10

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

Accepted Answer

Partners have unlimited liability for th

Question 11

Which of the following statements is correct with respect to limited partnerships?

Accepted Answer

A)  A limited partnership is created where all of the partners state in the partnership agreement that they will not be responsible for debts arising out of the partnership business and register as such with the government. 
B)  A limited partner is totally protected and can lose no money. 
C)  A limited partner can lose his status as a limited partner if he participates in the management of the business. 
D)  There can be no limited partnerships in Canada. If limited liability is desired, a corporation must be created. 
E)  There can only be one limited partner in any partnership, no matter how many partners are involved. 
A)  A limited partnership is created where all of the partners state in the partnership agreement that they will not be responsible for debts arising out of the partnership business and register as such with the government. 
B)  A limited partner is totally protected and can lose no money. 
C)  A limited partner can lose his status as a limited partner if he participates in the management of the business. 
D)  There can be no limited partnerships in Canada. If limited liability is desired, a corporation must be created. 
E)  There can only be one limited partner in any partnership, no matter how many partners are involved.

Question 12

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

Accepted Answer

A) True 
 B)False

Question 13

List three duties that an agent has to the principal.

Accepted Answer

An agent must act in a reasonable and co

Question 14

Discuss the role of the Partnership Act as it relates to people carrying on joint business activities.

Accepted Answer

This question requires students to demon

Question 15

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets are also at risk, such as their home and car.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is incorrect with respect to the law of partnership?

Accepted Answer

A)  The admission of a new partner requires the consent of all the partners. 
B)  All partners have the right to inspect all partnership records. 
C)  The death or insanity of one of the partners will dissolve the partnership. 
D)  A partnership can always be brought to an end by court order, no matter what the partnership agreement says. 
E)  Limited partners are limited in the sense that they cannot take part in the management of the partnership, but otherwise they are like any other partners. 
A)  The admission of a new partner requires the consent of all the partners. 
B)  All partners have the right to inspect all partnership records. 
C)  The death or insanity of one of the partners will dissolve the partnership. 
D)  A partnership can always be brought to an end by court order, no matter what the partnership agreement says. 
E)  Limited partners are limited in the sense that they cannot take part in the management of the partnership, but otherwise they are like any other partners.

Question 17

Grant got a job with Ace Computers Co. (Ace) as a salesman. He was given a course in salesmanship by Ace, business cards, and several of the company's order forms and brochures, and he was assigned an area in which to sell computers door-to-door on behalf of Ace. Grant would be paid on a commission basis. At his first house, he was so excited by the interest shown that he forgot the explicit instructions he had received-only cash sales permitted. As agent for Ace, he sold a computer to a Janet. She was to pay $25 per month for eight years because that was all she could afford. When Brown, sales manager of Ace, heard of the deal, he fired Grant and said he would not go through with the contract. However, Janet liked the computer very much and insisted that Ace provide her with one within the week as required by the contract. Which of the following accurately describes the legal position of the parties?

Accepted Answer

A)  Ace is not bound by the contract because no representations of authority were made by it to Janet. 
B)  Ace would not be bound because Grant failed to follow the exact instructions he had received. 
C)  Ace would be bound because the agent Grant acted within his apparent authority. 
D)  Grant had implied authority to sell computers on credit; selling computers necessitates selling on credit, despite the prohibition. 
E)  Brown is personally liable to Janet because he is the employee of the company who decided not to honour the contract. 
A)  Ace is not bound by the contract because no representations of authority were made by it to Janet. 
B)  Ace would not be bound because Grant failed to follow the exact instructions he had received. 
C)  Ace would be bound because the agent Grant acted within his apparent authority. 
D)  Grant had implied authority to sell computers on credit; selling computers necessitates selling on credit, despite the prohibition. 
E)  Brown is personally liable to Janet because he is the employee of the company who decided not to honour the contract.

Question 18

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

Accepted Answer

A)  Because of the concept of limited liability, he can lose only what he has invested in the hotel. 
B)  The book store assets will only be available to the bank if the book store is operated by Smith in conjunction with the hotel. 
C)  The bank can look to the assets of the book store to pay off a debt. 
D)  The bank can only go after the assets of the book store if Smith was the actual person who negotiated the loan with the bank. 
E)  Although the bank can go after Smith's personal assets, they cannot go after the assets of the book store because the book store is a separate legal entity from Smith. 
A)  Because of the concept of limited liability, he can lose only what he has invested in the hotel. 
B)  The book store assets will only be available to the bank if the book store is operated by Smith in conjunction with the hotel. 
C)  The bank can look to the assets of the book store to pay off a debt. 
D)  The bank can only go after the assets of the book store if Smith was the actual person who negotiated the loan with the bank. 
E)  Although the bank can go after Smith's personal assets, they cannot go after the assets of the book store because the book store is a separate legal entity from Smith.

Question 19

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Accepted Answer

A)  Where two people agree to enter into a partnership, there is no partnership created unless all of the elements of a contract are present. 
B)  A partnership can be created only by contract. 
C)  For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
D)  A partnership can be created by an intention to share the revenues between the partners. 
E)  For a person to be a limited partner, there must be at least two general partners. 
A)  Where two people agree to enter into a partnership, there is no partnership created unless all of the elements of a contract are present. 
B)  A partnership can be created only by contract. 
C)  For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
D)  A partnership can be created by an intention to share the revenues between the partners. 
E)  For a person to be a limited partner, there must be at least two general partners.

Question 20

For an agency agreement to be binding between the principal and agent, what is required and what is the effect if a required element is not met?

Accepted Answer

All of the elements of a contract, such

If an agent breaches his duty to his principal, his principal can sue the agent successfully for

If you hire Gnowsky to act as your agent, which of the following is true with regard to the duties he owes to you?

The partners can change the terms of their responsibilities to each other in the partnership agreement, but cannot change their obligations to third parties.

Distinguish between an agent and an employee.

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

Explain what is meant by an "enduring power of attorney."

Which of the following is correct with respect to limited partnerships?

With regard to liability of partners, which of the following is true?

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

Which of the following statements is correct with respect to limited partnerships?

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

List three duties that an agent has to the principal.

Discuss the role of the Partnership Act as it relates to people carrying on joint business activities.

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets are also at risk, such as their home and car.

Which of the following is incorrect with respect to the law of partnership?

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

Which one of the following statements is correct with respect to the creation of a partnership agreement?

For an agency agreement to be binding between the principal and agent, what is required and what is the effect if a required element is not met?

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

If an agent breaches his duty to his principal, his principal can sue the agent successfully for

If you hire Gnowsky to act as your agent, which of the following is true with regard to the duties he owes to you?

The partners can change the terms of their responsibilities to each other in the partnership agreement, but cannot change their obligations to third parties.

Distinguish between an agent and an employee.

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

Explain what is meant by an "enduring power of attorney."

Which of the following is correct with respect to limited partnerships?

With regard to liability of partners, which of the following is true?

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

Which of the following statements is correct with respect to limited partnerships?

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

List three duties that an agent has to the principal.

Discuss the role of the Partnership Act as it relates to people carrying on joint business activities.

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets are also at risk, such as their home and car.

Which of the following is incorrect with respect to the law of partnership?

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

Which one of the following statements is correct with respect to the creation of a partnership agreement?

For an agency agreement to be binding between the principal and agent, what is required and what is the effect if a required element is not met?

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