Question 1

The "Inside Story" referenced the actions of Hewlett-Packard and its corporate spying activities.What is the investigative technique called "pretexting"?

Accepted Answer

A)  A practice whereby a person pretends to be someone else, typically over the telephone, in order to obtain information. 
B)  A practice whereby a person pretends to be someone else, typically through a personal visit, in order to obtain information. 
C)  A practice whereby a person induces someone, often an elderly person, to sign a contract purchasing unneeded services. 
D)  A practice whereby a person induces someone, often an elderly person, to sign a contract purchasing unneeded goods. 
A)  A practice whereby a person pretends to be someone else, typically over the telephone, in order to obtain information. 
B)  A practice whereby a person pretends to be someone else, typically through a personal visit, in order to obtain information. 
C)  A practice whereby a person induces someone, often an elderly person, to sign a contract purchasing unneeded services. 
D)  A practice whereby a person induces someone, often an elderly person, to sign a contract purchasing unneeded goods. A

Question 2

What is considered in determining the scope of an agent's implied authority?

Accepted Answer

To determine an agent's implied authority,courts look to the usual and customary authority of the agent.Usual authority is the authority that the agent has been allowed to exercise in the past.Customary authority consists of the authority that agents of that type normally would have.

Question 3

Discuss the elements that are considered in determining whether a worker is an employee or an independent contractor.

Accepted Answer

Considerations include the amount of control the employer exercises; whether the employed person engages in an occupation distinct from that of the employer; whether the kind of work being done is usually performed under the direction of an employer or by a specialist without supervision; the degree of skill the work requires; whether the employer provides tools and a place of work; the length of time the worker is employed; whether the worker is paid on the basis of time or by the job; and whether the worker offers his or her services to the public at large.

Question 4

An agency relationship can be created by:

Accepted Answer

A)  an express contract. 
B)  an implied contract. 
C)  an express contract, but not an implied contract. 
D)  both by an express contract and an implied contract. 
A)  an express contract. 
B)  an implied contract. 
C)  an express contract, but not an implied contract. 
D)  both by an express contract and an implied contract.

Question 5

Apparent authority may be based on which of the following?

Accepted Answer

A)  Only words of the principal or acts of the principal. 
B)  Only words of the principal or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time. 
C)  Words of the principal, acts of the principal, or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time. 
D)  Express contractual authority only. 
A)  Only words of the principal or acts of the principal. 
B)  Only words of the principal or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time. 
C)  Words of the principal, acts of the principal, or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time. 
D)  Express contractual authority only.

Question 6

The Electronic Signatures in Global and National Commerce Act (E-SIGN)provides that contracts executed by electronic agents are invalid.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT a duty of an agent to a principal?

Accepted Answer

A)  Loyalty 
B)  Due care 
C)  Maximizing profits 
D)  Obedience 
A)  Loyalty 
B)  Due care 
C)  Maximizing profits 
D)  Obedience

Question 8

Agency is perhaps the most pervasive legal relationship in the business world.

Accepted Answer

A) True 
 B)False

Question 9

An agency by __________ occurs when a person leads another to believe that someone else is his or her agent and is thereafter prevented from denying it.

Accepted Answer

A)  ratification 
B)  conduct 
C)  agreement 
D)  estoppel 
A)  ratification 
B)  conduct 
C)  agreement 
D)  estoppel

Question 10

A manager should review the scope of authority granted to the company's workers and consider the company's potential liability for the actions of those workers.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

In CASE 5.2EBC I,Inc.v.Goldman,Sachs & Co.,(2005)the plaintiffs claimed that Goldman Sachs breached a fiduciary duty in acting as an underwriter and in providing advice to eToys,the plaintiff's predecessor,in regard to an initial public offering of stock.How did the court rule and why?

Accepted Answer

A)  The court dismissed the case on the basis that Goldman Sachs as an underwriter could not be considered a fiduciary based on its role in the transactions at issue. 
B)  The court refused to order a dismissal of the plaintiff's claim and found that Goldman Sachs' failure to disclose a material conflict of interest established a claim for breach of fiduciary duty. 
C)  The court dismissed the case because Goldman Sachs had every right to make a profit out of the transaction so long as no actual misrepresentations were made to the plaintiffs. 
D)  The court refused to order a dismissal of the plaintiff's claim and found that Goldman Sachs' could be held liable based on material misrepresentations made to the plaintiffs regarding the value of the stock involved in the initial public offering. 
A)  The court dismissed the case on the basis that Goldman Sachs as an underwriter could not be considered a fiduciary based on its role in the transactions at issue. 
B)  The court refused to order a dismissal of the plaintiff's claim and found that Goldman Sachs' failure to disclose a material conflict of interest established a claim for breach of fiduciary duty. 
C)  The court dismissed the case because Goldman Sachs had every right to make a profit out of the transaction so long as no actual misrepresentations were made to the plaintiffs. 
D)  The court refused to order a dismissal of the plaintiff's claim and found that Goldman Sachs' could be held liable based on material misrepresentations made to the plaintiffs regarding the value of the stock involved in the initial public offering.

Question 13

Agents owe a fiduciary duty to the principal.Describe the specific responsibilities that are generated by this duty.Discuss fully.

Accepted Answer

Students should fully discuss the duties

Question 14

Whether a person is an independent contractor or an employee depends on what he or she does,not how the relationship is characterized by the parties.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is NOT true 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 16

Which of the following is true regarding an independent contractor's entitlement to fringe benefits offered by a principal?

Accepted Answer

A)  An independent contractor is generally eligible for the same fringe benefits provided to employees. 
B)  An independent contractor is generally eligible for the same medical insurance provided to employees but not for retirement benefits. 
C)  An independent contractor is generally eligible for the same retirement benefits provided to employees but not for medical benefits. 
D)  An independent contractor is not generally eligible for the fringe benefits provided to employees. 
A)  An independent contractor is generally eligible for the same fringe benefits provided to employees. 
B)  An independent contractor is generally eligible for the same medical insurance provided to employees but not for retirement benefits. 
C)  An independent contractor is generally eligible for the same retirement benefits provided to employees but not for medical benefits. 
D)  An independent contractor is not generally eligible for the fringe benefits provided to employees.

Question 17

The term "customary authority" refers to authority that agents must have by law.

Accepted Answer

A) True 
 B)False

Question 18

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 19

What is the meaning of the term "respondeat superior"?

Accepted Answer

A)  Let the master answer 
B)  Let the servant respond 
C)  Let both the master and servant respond 
D)  The agreement must be in writing 
A)  Let the master answer 
B)  Let the servant respond 
C)  Let both the master and servant respond 
D)  The agreement must be in writing

Question 20

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.

Exam 5: Agency.

The "Inside Story" referenced the actions of Hewlett-Packard and its corporate spying activities.What is the investigative technique called "pretexting"?

What is considered in determining the scope of an agent's implied authority?

Discuss the elements that are considered in determining whether a worker is an employee or an independent contractor.

An agency relationship can be created by:

Apparent authority may be based on which of the following?

The Electronic Signatures in Global and National Commerce Act (E-SIGN)provides that contracts executed by electronic agents are invalid.

Which of the following is NOT a duty of an agent to a principal?

Agency is perhaps the most pervasive legal relationship in the business world.

An agency by __________ occurs when a person leads another to believe that someone else is his or her agent and is thereafter prevented from denying it.

A manager should review the scope of authority granted to the company's workers and consider the company's potential liability for the actions of those workers.

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

In CASE 5.2EBC I,Inc.v.Goldman,Sachs & Co.,(2005)the plaintiffs claimed that Goldman Sachs breached a fiduciary duty in acting as an underwriter and in providing advice to eToys,the plaintiff's predecessor,in regard to an initial public offering of stock.How did the court rule and why?

Agents owe a fiduciary duty to the principal.Describe the specific responsibilities that are generated by this duty.Discuss fully.

Whether a person is an independent contractor or an employee depends on what he or she does,not how the relationship is characterized by the parties.

Which of the following is NOT true regarding an agency relationship?

Which of the following is true regarding an independent contractor's entitlement to fringe benefits offered by a principal?

The term "customary authority" refers to authority that agents must have by law.

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

What is the meaning of the term "respondeat superior"?

Which of the following is true regarding express authority?

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