Question 1

Which of the following statements is true with regard to an agent's duties?

Accepted Answer

A)  A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B)  An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C)  An agent cannot act for two principals even with the knowledge and consent of those principals. 
D)  An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E)  An agent need not disclose all relevant information to the principal. 
A)  A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. 
B)  An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. 
C)  An agent cannot act for two principals even with the knowledge and consent of those principals. 
D)  An agent must always scrupulously account for moneys coming into his hands on behalf of his principal. 
E)  An agent need not disclose all relevant information to the principal.

Question 2

A real estate salesperson, without disclosing the fact to his client, purchases the house the client is selling for himself. Discuss the legal position of the parties.

Accepted Answer

This is clearly a breach of th

Question 3

A third party is bound to the principal only when he knows that the agent is acting for that principal.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Distinguish between an agent and an employee.

Accepted Answer

An employee performs work under the cont

Question 6

Which of the following is an example of an agent's breach of fiduciary duty to his principal?

Accepted Answer

A)  An agent for the vendor collects a commission from the purchaser but told his principal and obtained his consent. 
B)  An agent for the vendor makes a profit on the transaction he negotiates for his vendor above his commission and doesn't tell his principal/vendor. 
C)  An agent discloses to his principal/vendor that he is giving some of his commission to the purchaser to induce the purchaser to sign the contract that the principal/vendor wants. 
D)  An agent negotiates a higher price than the highest sale price reasonably possible at that time. 
E)  The agent takes presents from the third party and passes them on to the principal. 
A)  An agent for the vendor collects a commission from the purchaser but told his principal and obtained his consent. 
B)  An agent for the vendor makes a profit on the transaction he negotiates for his vendor above his commission and doesn't tell his principal/vendor. 
C)  An agent discloses to his principal/vendor that he is giving some of his commission to the purchaser to induce the purchaser to sign the contract that the principal/vendor wants. 
D)  An agent negotiates a higher price than the highest sale price reasonably possible at that time. 
E)  The agent takes presents from the third party and passes them on to the principal.

Question 7

Apparent authority is determined by the representation of the agent.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  A partner is responsible for all torts committed by their partners. 
B)  A partner is only responsible for those torts committed by the partner that are committed during the course of the business. 
C)  Even where the tort is committed outside the scope of the partnership business, the partners will be liable for a tort committed by their partner. 
D)  If a partner commits a tort in his own personal capacity outside of the scope of the partnership business, the victim has no recourse against any of the partnership assets. 
E)  Where a person is injured by the careless action of an employee of a partnership in the course of his employment, that injured person has recourse against the assets of the partnership, but if those assets are not enough, he cannot go against the personal assets of the partners themselves. 
A)  A partner is responsible for all torts committed by their partners. 
B)  A partner is only responsible for those torts committed by the partner that are committed during the course of the business. 
C)  Even where the tort is committed outside the scope of the partnership business, the partners will be liable for a tort committed by their partner. 
D)  If a partner commits a tort in his own personal capacity outside of the scope of the partnership business, the victim has no recourse against any of the partnership assets. 
E)  Where a person is injured by the careless action of an employee of a partnership in the course of his employment, that injured person has recourse against the assets of the partnership, but if those assets are not enough, he cannot go against the personal assets of the partners themselves.

Question 9

Which of the following is a violation of the fiduciary duty of a partner?

Accepted Answer

A)  Where one partner uses information that he has gained from the partnership for the advantage of the partnership 
B)  Where a partner uses the partnership property for partnership business 
C)  Where one partner carries on a business unrelated to the partnership with the permission of the partners 
D)  When one partner starts another business that is the same as or in competition with the partnership business without the consent of the other partners 
E)  Where one partner learns of an investment opportunity in the field of the partnership and tells the partners, but the partners decline on the opportunity so he takes advantage of it himself 
A)  Where one partner uses information that he has gained from the partnership for the advantage of the partnership 
B)  Where a partner uses the partnership property for partnership business 
C)  Where one partner carries on a business unrelated to the partnership with the permission of the partners 
D)  When one partner starts another business that is the same as or in competition with the partnership business without the consent of the other partners 
E)  Where one partner learns of an investment opportunity in the field of the partnership and tells the partners, but the partners decline on the opportunity so he takes advantage of it himself

Question 10

Fred and Carole were trying to create a list of the pros and cons of sole proprietorship, partnership, and corporation to determine the best structure for carrying on business. Which of the following is true in regards to being a general partner?

Accepted Answer

A)  A partner is liable for only the amount that he or she invested in the partnership firm. 
B)  Every general partner faces limited liability for the debts of the partnership. 
C)  Each partner is an agent for every other partner and of the firm itself, so a partner may be liable for the contracts made by an incompetent partner. 
D)  Retiring from a partnership by giving notice to his partners frees a partner from liabilities he faced while being a partner of the firm. 
E)  A partner is liable to pay from his personal assets only when the partner has committed a criminal act. 
A)  A partner is liable for only the amount that he or she invested in the partnership firm. 
B)  Every general partner faces limited liability for the debts of the partnership. 
C)  Each partner is an agent for every other partner and of the firm itself, so a partner may be liable for the contracts made by an incompetent partner. 
D)  Retiring from a partnership by giving notice to his partners frees a partner from liabilities he faced while being a partner of the firm. 
E)  A partner is liable to pay from his personal assets only when the partner has committed a criminal act.

Question 11

Which of the following statements best describes a partnership?

Accepted Answer

A)  Partnership involves two or more persons carrying on business with a view towards profits. 
B)  Partnerships involve limited liability. 
C)  Partnerships are created when two or more persons specifically agree to be in partnership. 
D)  Partnerships are only created when they have been properly registered with the government. 
E)  Partnerships are like any other form of contract; they can only be created when there is consensus between the parties in the form of offer and acceptance to that effect. 
A)  Partnership involves two or more persons carrying on business with a view towards profits. 
B)  Partnerships involve limited liability. 
C)  Partnerships are created when two or more persons specifically agree to be in partnership. 
D)  Partnerships are only created when they have been properly registered with the government. 
E)  Partnerships are like any other form of contract; they can only be created when there is consensus between the parties in the form of offer and acceptance to that effect.

Question 12

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

Accepted Answer

A)  the reasonable agent theory. 
B)  agency by express agreement. 
C)  the failure of the principal to register the agency agreement. 
D)  the agent's apparent authority. 
E)  fiduciary duty. 
A)  the reasonable agent theory. 
B)  agency by express agreement. 
C)  the failure of the principal to register the agency agreement. 
D)  the agent's apparent authority. 
E)  fiduciary duty.

Question 13

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 14

List three duties that an agent has to the principal.

Accepted Answer

An agent must act in a reasonable and co

Question 15

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 16

Which of the following is correct with respect to the ratification of an agent's contracts?

Accepted Answer

A)  A principal can ratify a contract where the agent has gone beyond both his actual and apparent authority. 
B)  A principal can only ratify an agreement entered into by an agent if his name has not been used. 
C)  When a contract entered into by an agent is ratified by a principal, it commences at the time the principal ratifies the contract. 
D)  The agent can set a time limit within which the ratification must take place. 
E)  A contract can only be ratified if the principal was not able to enter into the contract himself at the time of ratification. 
A)  A principal can ratify a contract where the agent has gone beyond both his actual and apparent authority. 
B)  A principal can only ratify an agreement entered into by an agent if his name has not been used. 
C)  When a contract entered into by an agent is ratified by a principal, it commences at the time the principal ratifies the contract. 
D)  The agent can set a time limit within which the ratification must take place. 
E)  A contract can only be ratified if the principal was not able to enter into the contract himself at the time of ratification.

Question 17

In which one of the following situations will a court find that a partnership exists?

Accepted Answer

A)  Joe and Mary promote several dances at school and split the profits. 
B)  Joe and Mary, while in college, purchase a house and share the profits from the rent after deducting expenses. 
C)  Joe, a partner in a law firm, dies and Joe's widow takes over Joe's share of the profits. 
D)  Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
E)  Joe sells his business to Harry for $10,000 for the assets and a further $20,000 for good will, the good will portion to be paid at a rate of 20% of the profits from the business until paid. 
A)  Joe and Mary promote several dances at school and split the profits. 
B)  Joe and Mary, while in college, purchase a house and share the profits from the rent after deducting expenses. 
C)  Joe, a partner in a law firm, dies and Joe's widow takes over Joe's share of the profits. 
D)  Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
E)  Joe sells his business to Harry for $10,000 for the assets and a further $20,000 for good will, the good will portion to be paid at a rate of 20% of the profits from the business until paid.

Question 18

Unlimited liability means that an investor can only lose everything he has invested in a corporation.

Accepted Answer

A) True 
 B)False

Question 19

Explain how the authority of an agent may be terminated.

Accepted Answer

Such authority is usually terminated by

Question 20

Which one of the following statements is correct with respect to the liability of partners?

Accepted Answer

A)  When a partner enters into a partnership arrangement, he can only lose what he has invested in that partnership. 
B)  If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
C)  A general partner is responsible, independent of what he has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
D)  If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner. 
E)  A partner can protect himself from any liability beyond his investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability. 
A)  When a partner enters into a partnership arrangement, he can only lose what he has invested in that partnership. 
B)  If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
C)  A general partner is responsible, independent of what he has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
D)  If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner. 
E)  A partner can protect himself from any liability beyond his investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability.

Which of the following statements is true with regard to an agent's duties?

A real estate salesperson, without disclosing the fact to his client, purchases the house the client is selling for himself. Discuss the legal position of the parties.

A third party is bound to the principal only when he knows that the agent is acting for that principal.

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

Distinguish between an agent and an employee.

Which of the following is an example of an agent's breach of fiduciary duty to his principal?

Apparent authority is determined by the representation of the agent.

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

Which of the following is a violation of the fiduciary duty of a partner?

Fred and Carole were trying to create a list of the pros and cons of sole proprietorship, partnership, and corporation to determine the best structure for carrying on business. Which of the following is true in regards to being a general partner?

Which of the following statements best describes a partnership?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

List three duties that an agent has to the principal.

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

Which of the following is correct with respect to the ratification of an agent's contracts?

In which one of the following situations will a court find that a partnership exists?

Unlimited liability means that an investor can only lose everything he has invested in a corporation.

Explain how the authority of an agent may be terminated.

Which one of the following statements is correct with respect to the liability of partners?

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 statements is true with regard to an agent's duties?

A real estate salesperson, without disclosing the fact to his client, purchases the house the client is selling for himself. Discuss the legal position of the parties.

A third party is bound to the principal only when he knows that the agent is acting for that principal.

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

Distinguish between an agent and an employee.

Which of the following is an example of an agent's breach of fiduciary duty to his principal?

Apparent authority is determined by the representation of the agent.

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

Which of the following is a violation of the fiduciary duty of a partner?

Fred and Carole were trying to create a list of the pros and cons of sole proprietorship, partnership, and corporation to determine the best structure for carrying on business. Which of the following is true in regards to being a general partner?

Which of the following statements best describes a partnership?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

List three duties that an agent has to the principal.

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

Which of the following is correct with respect to the ratification of an agent's contracts?

In which one of the following situations will a court find that a partnership exists?

Unlimited liability means that an investor can only lose everything he has invested in a corporation.

Explain how the authority of an agent may be terminated.

Which one of the following statements is correct with respect to the liability of partners?

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