Question 1

The bankruptcy of an agent automatically terminates an agency relationship.

Accepted Answer

A) True 
 B)False  False

Question 2

Pamela hired Lena to sell her business.Lena

Accepted Answer

A) can buy the business as long as the price is fair. 
B) can buy the business as long as she qualifies for financing. 
C) can buy the business only with Pamela's permission. 
D) cannot buy the business under any circumstances. 
A) can buy the business as long as the price is fair. 
B) can buy the business as long as she qualifies for financing. 
C) can buy the business only with Pamela's permission. 
D) cannot buy the business under any circumstances. C

Question 3

Alex worked for years for MegaCorp.During his employment with MegaCorp,he learned a great deal of confidential information and knew that if this information got into the hands of competitors or the general public,MegaCorp could suffer great business losses.Alex claims that he was wrongfully fired by MegaCorp and accordingly he believes he has no obligation to MegaCorp to keep any information he acquired with them as confidential.MegaCorp claims that Alex is under a continuing duty to keep confidential information secret,even though he is no longer with the company.Who is right? Why?

Accepted Answer

MegaCorp.is right.Regardless of why Alex no longer works for MegaCorp,he is under a continuing duty not to use or disclose the company's confidential information after he leaves the company.Alex had a fiduciary duty of loyalty to his employer when he worked for it and such duty does not terminate relative to trade secrets or confidential information after he is no longer employed by that company.

Question 4

Larry decided to relocate to Germany.Larry hired Happy Homes,Inc.to find a buyer and contract for the sale of his house in the U.S.The agency relationship between Larry and Happy Homes must be evidenced with a written agreement.

Accepted Answer

A) True 
 B)False

Question 5

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Accepted Answer

A) True 
 B)False

Question 6

A principal is bound by contracts that an agent enters into with authority.Discuss the various types of contractual authority an agent may have.

Accepted Answer

Authority is the legal ability of an age

Question 7

Which of the following persons is NOT an agent?

Accepted Answer

A) Diane, a shoe salesperson for a retail store. 
B) Tim, a real estate broker for a large real estate company. 
C) Craig, a telephone marketing employee. 
D) Harold, a trustee to the beneficiaries of an estate. 
A) Diane, a shoe salesperson for a retail store. 
B) Tim, a real estate broker for a large real estate company. 
C) Craig, a telephone marketing employee. 
D) Harold, a trustee to the beneficiaries of an estate.

Question 8

Mohammad was an employee in the new product development department of Estay Inc.Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months.Estay took great care to keep information concerning the new product a secret.Ceries,Inc.,a competitor of Estay,persuaded Mohammad to leave Estay to direct Ceries' marketing department.Which statement is correct?

Accepted Answer

A) Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development. 
B) Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated. 
C) Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule. 
D) Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency. 
A) Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development. 
B) Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated. 
C) Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule. 
D) Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency.

Question 9

Circus Pizza contracted with Art to run its birthday parties.Art's responsibilities included supervising the children and organizing the games.Circus did not investigate Art's background,which included a history of assaulting children.Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party.Circus Pizza

Accepted Answer

A) cannot be liable for the damages because Art committed an unforeseeable intentional tort. 
B) cannot be held liable for the damages because Art's conduct was not in the scope of employment. 
C) may be held liable on the basis of negligent hiring. 
D) may be held liable only if Circus actually knew of Art's background. 
A) cannot be liable for the damages because Art committed an unforeseeable intentional tort. 
B) cannot be held liable for the damages because Art's conduct was not in the scope of employment. 
C) may be held liable on the basis of negligent hiring. 
D) may be held liable only if Circus actually knew of Art's background.

Question 10

Mrs.O'Leary hired Jenna to sell her house in Michigan.She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate,acting as a prudent person." On May 30,Jenna finalized a deal with Brandon for the purchase of the house.Brandon and Jenna signed the real estate contract that day.Jenna learned the next day that Mrs.O'Leary had died May 29.

Accepted Answer

A) The contract is void since the agency terminated May 29. 
B) The contract is valid since the agency's purpose was achieved before Jenna was notified of Mrs. O'Leary's death. 
C) The contract is voidable at the option of Mrs. O'Leary's estate. 
D) The contract is voidable at the option of Brandon. 
A) The contract is void since the agency terminated May 29. 
B) The contract is valid since the agency's purpose was achieved before Jenna was notified of Mrs. O'Leary's death. 
C) The contract is voidable at the option of Mrs. O'Leary's estate. 
D) The contract is voidable at the option of Brandon.

Question 11

Which of the following is NOT required of an agency relationship?

Accepted Answer

A) Consideration between parties 
B) A Fiduciary relationship 
C) Consent of the parties to act as agent or principal 
D) Control of principal over agent's conduct 
A) Consideration between parties 
B) A Fiduciary relationship 
C) Consent of the parties to act as agent or principal 
D) Control of principal over agent's conduct

Question 12

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15-year-old boy,to operate an industrial machine.Hiring the 15 year old violates the child labor laws.What should Tom do in this situation?

Accepted Answer

A) Tom should hire Elton; he has a duty to obey Esday's instructions. 
B) Tom should hire Elton; he has a duty of care to ensure that the government does not discover that Elton is 15 years old. 
C) Tom should not hire Elton; he has a duty of care and he would not be caring for Elton. 
D) Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical. 
A) Tom should hire Elton; he has a duty to obey Esday's instructions. 
B) Tom should hire Elton; he has a duty of care to ensure that the government does not discover that Elton is 15 years old. 
C) Tom should not hire Elton; he has a duty of care and he would not be caring for Elton. 
D) Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical.

Question 13

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

Accepted Answer

A) True 
 B)False

Question 14

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

Accepted Answer

A) True 
 B)False

Question 15

Grant is a delivery person for Watkins Furniture.One day,after delivering a chair to Nadine's house,he stopped at a fast food restaurant to get a sandwich at the drive-through window.As he was leaving the parking lot,he accidentally hit the rear of Blanche's car.Discuss the possible liability of Watkins for Grant's accident.Would there be any difference in the potential liability of Watkins if Grant had the accident after driving 30 miles away to visit a friend?

Accepted Answer

The major issue here is abandonment.Watk

Question 16

An agent may not engage in inappropriate behavior that reflects badly on the principal.This rule applies to conduct

Accepted Answer

A) during working hours. 
B) during off-duty time. 
C) during both working hours and off-duty time. 
D) only by public officials. 
A) during working hours. 
B) during off-duty time. 
C) during both working hours and off-duty time. 
D) only by public officials.

Question 17

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Accepted Answer

In determining if agents are employees o

Question 18

Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

Accepted Answer

A) True 
 B)False

Question 19

Cameron,editor of the local newspaper,assigned to Jim the writing of a story about pollution of a nearby stream.Although Jim used reasonable care in gathering and checking his information,unknown to Jim,the story contained a defamatory statement about Maureen.Maureen reads the story and sues Jim for libel.Cameron,who read and published the story

Accepted Answer

A) must indemnify Jim for Maureen's claim. 
B) need not indemnify Jim for Maureen's claim because Jim should have checked his facts more carefully. 
C) need not indemnify Jim for Maureen's claim because Jim breached his duty to obey instructions. 
D) can recover damages from Jim for any injury to the newspaper resulting from Jim's story. 
A) must indemnify Jim for Maureen's claim. 
B) need not indemnify Jim for Maureen's claim because Jim should have checked his facts more carefully. 
C) need not indemnify Jim for Maureen's claim because Jim breached his duty to obey instructions. 
D) can recover damages from Jim for any injury to the newspaper resulting from Jim's story.

Question 20

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

Accepted Answer

A) True 
 B)False

Exam 28: Agency Law

The bankruptcy of an agent automatically terminates an agency relationship.

Pamela hired Lena to sell her business.Lena

Larry decided to relocate to Germany.Larry hired Happy Homes,Inc.to find a buyer and contract for the sale of his house in the U.S.The agency relationship between Larry and Happy Homes must be evidenced with a written agreement.

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

A principal is bound by contracts that an agent enters into with authority.Discuss the various types of contractual authority an agent may have.

Which of the following persons is NOT an agent?

Which of the following is NOT required of an agency relationship?

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15-year-old boy,to operate an industrial machine.Hiring the 15 year old violates the child labor laws.What should Tom do in this situation?

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

An agent may not engage in inappropriate behavior that reflects badly on the principal.This rule applies to conduct

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

Introduction to Law

Business Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Cyberlaw and Privacy

Introduction to Contracts

Agreement

Consideration

Legality

Capacity and Consent

Written Contracts

Third Parties

Performance, Breach and Discharge

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants' Liability

Employment and Labor Law

Employment Discrimination

Starting a Business: LLCs and Other Options

Partnerships

Life and Death of a Corporation

Management Duties

Shareholder Rights

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant

Personal Property and Bailment

Planning for the Future: Estates and Insurance

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