Question 1

In which of the following situations does the agent have no liability to third parties?

Accepted Answer

A) contract entered into with express authority and a fully disclosed principal 
B) contract entered into with no authority but later ratified in full by the principal 
C) contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators 
D) The agent has no liability in any of the above. 
A) contract entered into with express authority and a fully disclosed principal 
B) contract entered into with no authority but later ratified in full by the principal 
C) contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators 
D) The agent has no liability in any of the above.

Question 2

In an agency relationship,both the principal and agent must have legal capacity.

Accepted Answer

A) True 
 B)False

Question 3

In an undisclosed principal situation in which the agent does not have the authority to enter into a contract for real property and does so:

Accepted Answer

A) only the principal is liable on the contract. 
B) the third party can elect to hold the principal or agent liable. 
C) only the agent is liable on the contract. 
D) none of the above 
A) only the principal is liable on the contract. 
B) the third party can elect to hold the principal or agent liable. 
C) only the agent is liable on the contract. 
D) none of the above

Question 4

The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated.

Accepted Answer

A) True 
 B)False

Question 5

Ellen Fishman was hired by Attics,Inc.,a company that does attic refurbishments and redesigns,to evaluate attics,provide homeowners with estimates,and,hopefully,sign them up with contracts for their attics.Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic.Because she was new at the job,Ellen forgot the demolition costs in the estimate.However,the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1,100.Attics,Inc.'s president has refused to do the attic for anything less than $15,000,what the estimate should have been.The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment,which was $12,500.

Accepted Answer

A) Attics, Inc.need not perform the refurbishment because Ellen did not have authority for the bid or contract. 
B) Attics, Inc.must perform the refurbishment for $11,000 because Ellen had authority to enter into the contract. 
C) Attics, Inc.need not perform the contract for $11,000 because Ellen made a mistake. 
D) none of the above 
A) Attics, Inc.need not perform the refurbishment because Ellen did not have authority for the bid or contract. 
B) Attics, Inc.must perform the refurbishment for $11,000 because Ellen had authority to enter into the contract. 
C) Attics, Inc.need not perform the contract for $11,000 because Ellen made a mistake. 
D) none of the above

Question 6

"I'll make good on my employee's promise," is an example of a ratification.

Accepted Answer

A) True 
 B)False

Question 7

What is another term for an agency by estoppel?

Accepted Answer

A) implied agency authority 
B) apparent agency authority 
C) authority by custom 
D) none of the above 
A) implied agency authority 
B) apparent agency authority 
C) authority by custom 
D) none of the above

Question 8

Express authority must be in writing.

Accepted Answer

A) True 
 B)False

Question 9

In a partially disclosed principal relationship,who is liable to the third party on a contract outside the agent's authority?

Accepted Answer

A) principal 
B) agent 
C) both a and b 
D) none of the above 
A) principal 
B) agent 
C) both a and b 
D) none of the above

Question 10

Hayley Franken works at Big Burger after school and on weekends.With her heavy course load,her job and being on the basketball team,Hayley finds that she is simply worn out most of the time.She has said to her manager at work," Sometimes I am not even sure how I drive myself home because I want to sleep so much." Hayley worked a double shift at Big Burger and did not leave until 2 AM,4 hours beyond her usual quitting time.On the way home,she apparently dozed off and struck another car head-on and was killed.Her parents are suing Big Burger for wrongful death.Discuss the liability issues.

Accepted Answer

Traditionally,employers are not liable f

Question 11

A personnel manual:

Accepted Answer

A) can constitute a contract in an employment-at-will relationship. 
B) can disclaim any promises made therein. 
C) is never a contract. 
D) none of the above 
A) can constitute a contract in an employment-at-will relationship. 
B) can disclaim any promises made therein. 
C) is never a contract. 
D) none of the above

Question 12

Which of the following types of agency relationships would have to be evidenced by a record to be valid?

Accepted Answer

A) A power of attorney to close on a land transaction. 
B) A power of attorney to close on the sale of a golf cart for $4,000. 
C) A power of attorney to sign a six-month lease. 
D) All of the above must be evidenced by a record for the agent to have authority. 
A) A power of attorney to close on a land transaction. 
B) A power of attorney to close on the sale of a golf cart for $4,000. 
C) A power of attorney to sign a six-month lease. 
D) All of the above must be evidenced by a record for the agent to have authority.

Question 13

Constructive notice of termination of an agent is public notice.

Accepted Answer

A) True 
 B)False

Question 14

Discuss why the peer review procedure is successful in some companies.

Accepted Answer

By utilizing three (or more)employees (m

Question 15

The public policy exception to the employment-at-will doctrine protects:

Accepted Answer

A) employees who are fired with cause. 
B) employees who engage in illegal conduct. 
C) whistle-blowers. 
D) none of the above 
A) employees who are fired with cause. 
B) employees who engage in illegal conduct. 
C) whistle-blowers. 
D) none of the above

Question 16

Haskins is an officer of a real estate development firm.Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there.The firm has always had board resolutions for purchases of property (as is common practice)but there was no resolution for this property purchase.The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property.Which of the following statements is true?

Accepted Answer

A) The firm can ratify Haskin's actions and take over the contract. 
B) The firm cannot ratify the contract unless Haskins had express authority to buy land. 
C) If the firm ratifies the contract, the effect is that Haskins is released from liability on it. 
D) none of the above 
A) The firm can ratify Haskin's actions and take over the contract. 
B) The firm cannot ratify the contract unless Haskins had express authority to buy land. 
C) If the firm ratifies the contract, the effect is that Haskins is released from liability on it. 
D) none of the above

Question 17

Russ Belmont is a staff accountant at a bank in the downtown Phoenix area.Belmont commutes to the bank each day from his suburban home in Mesa - a distance of 19 miles each way.Belmont's working hours are 8:00 AM to 5:00 PM and he commutes from 7:15 AM until he reaches the bank's parking garage between 7:45 and 8:00 (depending upon the traffic).If Russ is in an accident while on the freeway at 7:30 AM:

Accepted Answer

A) the bank will be liable for any injuries to third parties. 
B) the bank will not be liable for any injuries to third parties. 
C) Belmont is an independent contractor and the bank will have no liability for injuries or damages in the accident. 
D) none of the above 
A) the bank will be liable for any injuries to third parties. 
B) the bank will not be liable for any injuries to third parties. 
C) Belmont is an independent contractor and the bank will have no liability for injuries or damages in the accident. 
D) none of the above

Question 18

Lingering apparent authority results from:

Accepted Answer

A) the failure to give notice of termination. 
B) ratification. 
C) the lack of capacity on the part of the principal. 
D) none of the above 
A) the failure to give notice of termination. 
B) ratification. 
C) the lack of capacity on the part of the principal. 
D) none of the above

Question 19

Ellen Fishman was hired by Attics,Inc.,a company that does attic refurbishments and redesigns,to evaluate attics,provide homeowners with estimates,and,hopefully,sign them up with contracts for their attics.Ellen provided an estimate of $11,000 to the Kornbluths for a redesign of their attic.Because she was new at the job,Ellen forgot the demolition costs in the estimate.However,the Kornbluths signed a contract Ellen presented and put down a 10% deposit of $1100.Attics,Inc.'s president has refused to do the attic for anything less than $15,000,what the estimate should have been.The Kornbluths have no experience with remodeling and had only one other estimate for the refurbishment,which was $12,500.Attics,Inc.terminated Ellen.However,Ellen still had all the materials,books,contract forms,and her card from Attics,Inc.Ellen went out and got three homeowners to sign contracts for refurbishments for prices ranging from $15,000 to $22,000.Attics,Inc.:

Accepted Answer

A) need not perform any of the contracts because Ellen lacked authority. 
B) need not perform any of the contracts because the termination ended all of Ellen's authority. 
C) must perform on the contracts because Ellen had lingering apparent authority. 
D) both a and b 
A) need not perform any of the contracts because Ellen lacked authority. 
B) need not perform any of the contracts because the termination ended all of Ellen's authority. 
C) must perform on the contracts because Ellen had lingering apparent authority. 
D) both a and b

Question 20

In a master-servant relationship,the principal most likely will need to do which of the following?

Accepted Answer

A) Withhold income taxes for the agent 
B) Pay FICA for the agent 
C) Pay FUTA for the agent 
D) All of these 
A) Withhold income taxes for the agent 
B) Pay FICA for the agent 
C) Pay FUTA for the agent 
D) All of these

In which of the following situations does the agent have no liability to third parties?

In an agency relationship,both the principal and agent must have legal capacity.

In an undisclosed principal situation in which the agent does not have the authority to enter into a contract for real property and does so:

The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated.

"I'll make good on my employee's promise," is an example of a ratification.

What is another term for an agency by estoppel?

Express authority must be in writing.

In a partially disclosed principal relationship,who is liable to the third party on a contract outside the agent's authority?

A personnel manual:

Which of the following types of agency relationships would have to be evidenced by a record to be valid?

Constructive notice of termination of an agent is public notice.

Discuss why the peer review procedure is successful in some companies.

The public policy exception to the employment-at-will doctrine protects:

Lingering apparent authority results from:

In a master-servant relationship,the principal most likely will need to do which of the following?

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance,Remedies,and Collection

Product Advertising and Liability

Business Competition: Antitrust

Business and Intellectual Property Law

Governance and Structure: Forms of Doing Business

Governance and Regulation: Securities Law

Management of Employee Welfare

Management: Employment Discrimination

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Exam 16: Management of Employee Conduct: Agency

In which of the following situations does the agent have no liability to third parties?

In an agency relationship,both the principal and agent must have legal capacity.

In an undisclosed principal situation in which the agent does not have the authority to enter into a contract for real property and does so:

The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated.

"I'll make good on my employee's promise," is an example of a ratification.

What is another term for an agency by estoppel?

Express authority must be in writing.

In a partially disclosed principal relationship,who is liable to the third party on a contract outside the agent's authority?

A personnel manual:

Which of the following types of agency relationships would have to be evidenced by a record to be valid?

Constructive notice of termination of an agent is public notice.

Discuss why the peer review procedure is successful in some companies.

The public policy exception to the employment-at-will doctrine protects:

Lingering apparent authority results from:

In a master-servant relationship,the principal most likely will need to do which of the following?

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance,Remedies,and Collection

Product Advertising and Liability

Business Competition: Antitrust

Business and Intellectual Property Law

Governance and Structure: Forms of Doing Business

Governance and Regulation: Securities Law

Management of Employee Welfare

Management: Employment Discrimination

Filters