Question 1

Which of the following is incorrect with respect to the law governing limited partnerships?

Accepted Answer

A)  Limited partners' liability only extends to the amount of money they have invested in the partnership. 
B)  Limited partners, once registered as such, are assured of limited liability. 
C)  Limited partners can lose their limited status by participating in management. 
D)  Limited partners can lose their limited status by allowing their names to be associated with the name of the partnership. 
E)  Limited partners can lose their limited status by failing to register as such. 
A)  Limited partners' liability only extends to the amount of money they have invested in the partnership. 
B)  Limited partners, once registered as such, are assured of limited liability. 
C)  Limited partners can lose their limited status by participating in management. 
D)  Limited partners can lose their limited status by allowing their names to be associated with the name of the partnership. 
E)  Limited partners can lose their limited status by failing to register as such.

Question 2

Claire has been selling her famous cookies on her own to local bakeries. Her cookies are so popular that she needs to hire someone as an employee to help with the packaging and delivery. Claire has taken no formal steps regarding the form of business organization. Which of the following is true about Claire's situation?

Accepted Answer

A)  Claire is unable to legally hire an employee until she takes steps to incorporate. 
B)  Claire will be vicariously liable for the torts of her employee committed during the course of employment. 
C)  The employee that Claire hires will be, in law, a partner in Claire's business. 
D)  The employee that Claire hires will be liable for torts Claire commits during the course of the business. 
E)  Claire's liability is limited to the value of the cookie business. 
A)  Claire is unable to legally hire an employee until she takes steps to incorporate. 
B)  Claire will be vicariously liable for the torts of her employee committed during the course of employment. 
C)  The employee that Claire hires will be, in law, a partner in Claire's business. 
D)  The employee that Claire hires will be liable for torts Claire commits during the course of the business. 
E)  Claire's liability is limited to the value of the cookie business.

Question 3

In which one of the following situations will the transaction not be binding on the principal?

Accepted Answer

A)  A salesman at a men's clothing store has heard a rumor that the store will be going out of business. The boss is out of the store when a customer who has heard the same thing comes in and offers to purchase all of the stock, display cases, and fixtures. The salesman accepts on behalf of the employer. 
B)  A real estate salesperson, after disclosing the fact to his client, purchases the house the client is selling for himself. 
C)  An employee of a flower shop is sent to the flower market every week to make purchases. This week he is told to buy only roses, but he can't pass up a tremendous deal on daisies and purchases a large quantity of them for the store. 
D)  A chauffeur, going against specific instructions, purchases a new car for his employer. The employer has done nothing to lead the seller to believe the chauffeur has such authority, but is persuaded by the chauffeur to go for a drive before returning the car. 
E)  A truck driver who is not an agent (no actual, implied, or apparent authority) enters into a contract on behalf of his employer to sell the cargo of ripe tomatoes after the truck breaks down and he can't get hold of the boss. 
A)  A salesman at a men's clothing store has heard a rumor that the store will be going out of business. The boss is out of the store when a customer who has heard the same thing comes in and offers to purchase all of the stock, display cases, and fixtures. The salesman accepts on behalf of the employer. 
B)  A real estate salesperson, after disclosing the fact to his client, purchases the house the client is selling for himself. 
C)  An employee of a flower shop is sent to the flower market every week to make purchases. This week he is told to buy only roses, but he can't pass up a tremendous deal on daisies and purchases a large quantity of them for the store. 
D)  A chauffeur, going against specific instructions, purchases a new car for his employer. The employer has done nothing to lead the seller to believe the chauffeur has such authority, but is persuaded by the chauffeur to go for a drive before returning the car. 
E)  A truck driver who is not an agent (no actual, implied, or apparent authority) enters into a contract on behalf of his employer to sell the cargo of ripe tomatoes after the truck breaks down and he can't get hold of the boss.

Question 4

In which one of the following situations is the principal not responsible for the conduct of his agent?

Accepted Answer

A)  When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an independent agent. 
B)  When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an employee of Ace. 
C)  In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an employee of Ace. 
D)  In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an independent agent. 
E)  When driving the employer's car to sell vacuums to a customer, Joe hit a pedestrian. Joe was an employee. 
A)  When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an independent agent. 
B)  When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an employee of Ace. 
C)  In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an employee of Ace. 
D)  In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an independent agent. 
E)  When driving the employer's car to sell vacuums to a customer, Joe hit a pedestrian. Joe was an employee.

Question 5

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is false?

Accepted Answer

A)  A partner is an agent for the firm and the other partner, and thus Matt would be liable for a contract made by Frank on behalf of the partnership if the partnership funds could not cover it. 
B)  Matt could be liable for losses suffered by a client whose funds were misappropriated by Frank even if he (Matt) were not aware of the misappropriation and had no part in it. 
C)  A partner is liable to the full extent of his personal fortune if an employee of the firm was negligent in the course of his duties and there were insufficient partnership funds to cover the resulting loss. 
D)  A partner is not liable for any partnership debt that was incurred after he left as long as he gave notice in writing to his partner that he was retiring from the partnership. 
E)  A partner has unlimited liability for any loss suffered by the partnership because of a negligent act by one of the partners if the partnership funds are insufficient to cover the loss. 
A)  A partner is an agent for the firm and the other partner, and thus Matt would be liable for a contract made by Frank on behalf of the partnership if the partnership funds could not cover it. 
B)  Matt could be liable for losses suffered by a client whose funds were misappropriated by Frank even if he (Matt) were not aware of the misappropriation and had no part in it. 
C)  A partner is liable to the full extent of his personal fortune if an employee of the firm was negligent in the course of his duties and there were insufficient partnership funds to cover the resulting loss. 
D)  A partner is not liable for any partnership debt that was incurred after he left as long as he gave notice in writing to his partner that he was retiring from the partnership. 
E)  A partner has unlimited liability for any loss suffered by the partnership because of a negligent act by one of the partners if the partnership funds are insufficient to cover the loss.

Question 6

A sole proprietor is free from regulatory control.

Accepted Answer

A) True 
 B)False

Question 7

When Joe was given authority to do "anything necessarily incidental" to carrying out his agency function of selling vacuum cleaners for the principal, that gave Joe the authority to borrow money to purchase a car to be used in the business.

Accepted Answer

A) True 
 B)False

Question 8

Apparent authority is determined by the representation of the agent.

Accepted Answer

A) True 
 B)False

Question 9

A chauffeur, going against specific instructions, purchases a new car on behalf of his employer. The employer has done nothing to lead the seller to believe the chauffeur has authority but is persuaded by the chauffeur to go for a drive before returning the vehicle. Explain the legal position of the parties.

Accepted Answer

Ratification is a two-edged sword, and a

Question 10

In which one of the following situations has the duty between partners not been breached?

Accepted Answer

A)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z opens a shoe store in Regina as well. 
B)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z opens up a restaurant in the same city as a sole proprietorship. 
C)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z is the major shareholder in a corporation that sets up a restaurant in the same city. 
D)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z owns 50% of the shares in the company that supplies the restaurant with its food supplies. 
E)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z runs a catering business during the evening using the restaurant's facilities. 
A)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z opens a shoe store in Regina as well. 
B)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z opens up a restaurant in the same city as a sole proprietorship. 
C)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z is the major shareholder in a corporation that sets up a restaurant in the same city. 
D)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z owns 50% of the shares in the company that supplies the restaurant with its food supplies. 
E)  X, Y, and Z have a partnership in a restaurant business in Winnipeg. Unknown to his partners, Z runs a catering business during the evening using the restaurant's facilities.

Question 11

Explain how a person's status as a limited partner could be lost.

Accepted Answer

If the limited partner fails to register

Question 12

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Accepted Answer

Jones is in the business of practising l

Question 13

Explain what is meant by an agent's fiduciary duty. Give three examples of how that fiduciary duty can be breached.

Accepted Answer

Some examples from the text include: mus

Question 14

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

Accepted Answer

The main advantages of partnership are i

Question 16

The requirement of unanimous consent protects partners.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  All partnerships must be registered. 
B)  Partnership is generally a less costly method of carrying on business than incorporation. 
C)  All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
D)  The partnership relationship is governed by legislation that states that profits and losses are to be shared equally, and this cannot be modified by agreement. 
E)  Any major change in the partnership must be made by unanimous agreement, and this cannot be changed by partnership agreement. 
A)  All partnerships must be registered. 
B)  Partnership is generally a less costly method of carrying on business than incorporation. 
C)  All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
D)  The partnership relationship is governed by legislation that states that profits and losses are to be shared equally, and this cannot be modified by agreement. 
E)  Any major change in the partnership must be made by unanimous agreement, and this cannot be changed by partnership agreement.

Question 18

A contract entered into by an agent cannot be ratified inadvertently by the principal.

Accepted Answer

A) True 
 B)False

Question 19

Explain under what circumstances a partnership can come to an end.

Accepted Answer

A partnership can usually end by notice,

Question 20

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

Accepted Answer

A) True 
 B)False

Which of the following is incorrect with respect to the law governing limited partnerships?

In which one of the following situations will the transaction not be binding on the principal?

In which one of the following situations is the principal not responsible for the conduct of his agent?

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is false?

A sole proprietor is free from regulatory control.

When Joe was given authority to do "anything necessarily incidental" to carrying out his agency function of selling vacuum cleaners for the principal, that gave Joe the authority to borrow money to purchase a car to be used in the business.

Apparent authority is determined by the representation of the agent.

In which one of the following situations has the duty between partners not been breached?

Explain how a person's status as a limited partner could be lost.

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Explain what is meant by an agent's fiduciary duty. Give three examples of how that fiduciary duty can be breached.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

The requirement of unanimous consent protects partners.

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

A contract entered into by an agent cannot be ratified inadvertently by the principal.

Explain under what circumstances a partnership can come to an end.

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

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

Which of the following is incorrect with respect to the law governing limited partnerships?

In which one of the following situations will the transaction not be binding on the principal?

In which one of the following situations is the principal not responsible for the conduct of his agent?

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is false?

A sole proprietor is free from regulatory control.

When Joe was given authority to do "anything necessarily incidental" to carrying out his agency function of selling vacuum cleaners for the principal, that gave Joe the authority to borrow money to purchase a car to be used in the business.

Apparent authority is determined by the representation of the agent.

In which one of the following situations has the duty between partners not been breached?

Explain how a person's status as a limited partner could be lost.

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Explain what is meant by an agent's fiduciary duty. Give three examples of how that fiduciary duty can be breached.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

The requirement of unanimous consent protects partners.

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

A contract entered into by an agent cannot be ratified inadvertently by the principal.

Explain under what circumstances a partnership can come to an end.

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

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