Question 1

A sole proprietor is free from regulatory control.

Accepted Answer

A) True 
 B)False

Question 2

The ratification of a contract by the principal must be done in writing.

Accepted Answer

A) True 
 B)False

Question 3

A partner's liability for the torts of her partners extends beyond those committed in the course of the business.

Accepted Answer

A) True 
 B)False

Question 4

Distinguish between the actual and the apparent authority of an agent.

Accepted Answer

The actual authority of an agent is dete

Question 5

Information that comes to the agent because of his position as agent must be passed on to the third party.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is incorrect with respect to the responsibilities of partners to each other?

Accepted Answer

A)  Each partner owes the other partners a fiduciary duty. 
B)  Partners are free to compete with the partnership providing they do it on their own time. 
C)  Any information that one partner learns because of his position in the partnership must be used for the benefit of the partnership, not for personal use. 
D)  Unless the partners have agreed otherwise, profits and losses are shared equally. 
E)  Unless the partners have agreed otherwise, partners' expenses are to be reimbursed. 
A)  Each partner owes the other partners a fiduciary duty. 
B)  Partners are free to compete with the partnership providing they do it on their own time. 
C)  Any information that one partner learns because of his position in the partnership must be used for the benefit of the partnership, not for personal use. 
D)  Unless the partners have agreed otherwise, profits and losses are shared equally. 
E)  Unless the partners have agreed otherwise, partners' expenses are to be reimbursed.

Question 7

Joe was a salesman, newly hired by Radio Hut. On his first day on the job, he was left in charge of the store while the manager and the other salesmen went to lunch. They specifically told him not to sell anything over $50 but to just tell the customer to come back in an hour when they were back. While they were at lunch, a customer came in and decided to purchase a new Ultra HD TV and several accessories. The total sales price was $2600, and the customer couldn't wait. Joe sold her the merchandise at a $400 discount. When the customer returned the next day to pick up the goods, the manager refused to go through with the deal. Explain the manager's legal obligations in these circumstances.

Accepted Answer

Joe had apparent authority and

Question 8

Apparent authority is the authority the agent has based on what the principal has led the third party to believe.

Accepted Answer

A) True 
 B)False

Question 9

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

Accepted Answer

A)  Joe is in a partnership with Sam in a shoe store, and without telling Sam, Joe opens up a franchise of Big Toes Shoes in an adjoining municipality, which suffers a loss. 
B)  They made it clear in their partnership agreement that they would not be liable for each other's actions. 
C)  Joe, without the knowledge or consent of his partner Sam, purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D)  Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E)  Joe is in a partnership with Sam and injures a customer while doing partnership business. 
A)  Joe is in a partnership with Sam in a shoe store, and without telling Sam, Joe opens up a franchise of Big Toes Shoes in an adjoining municipality, which suffers a loss. 
B)  They made it clear in their partnership agreement that they would not be liable for each other's actions. 
C)  Joe, without the knowledge or consent of his partner Sam, purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D)  Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E)  Joe is in a partnership with Sam and injures a customer while doing partnership business.

Question 10

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Accepted Answer

A) True 
 B)False

Question 11

Dave and his sister Chris made unusual kites. They both created the designs; Dave made the patterns. Friends had always wanted to buy their kites. After Chris completed a college marketing program, she began to talk to Dave about going into business selling kites. Ed, a friend of Chris's, wanted to be involved. He said he could buy the supplies and do other odd chores. They decided to try to make a go of it and to share the profits as follows: Dave 35%, Chris 35%, and Ed 30%. Things went well for 7 months. They even hired George to deliver kites to the increased number of stores buying them. Chris and Ed became romantically involved. This was followed by a heated dispute. Ed disappeared with $1300 collected from customers and $600 worth of supplies, which he had bought on behalf of the business from their regular supplier. At about the same time, George negligently broke a customer's $200 lamp when he was delivering a kite. On these facts, which of the following is true?

Accepted Answer

A)  Since Dave, Chris, and Ed did not sign a partnership agreement, they are not considered a general partnership. 
B)  If the partnership funds are not sufficient to pay the partnership debts, the creditors can look to the individual partners for payment. 
C)  When Ed buys supplies for the business on credit, he is acting as an agent for the business and he alone is liable for those debts. 
D)  Although George broke the lamp while delivering kites, the partners are not liable, because it was George's own fault. 
E)  Only Chris would be responsible Ed's misapplication of the customers' money. 
A)  Since Dave, Chris, and Ed did not sign a partnership agreement, they are not considered a general partnership. 
B)  If the partnership funds are not sufficient to pay the partnership debts, the creditors can look to the individual partners for payment. 
C)  When Ed buys supplies for the business on credit, he is acting as an agent for the business and he alone is liable for those debts. 
D)  Although George broke the lamp while delivering kites, the partners are not liable, because it was George's own fault. 
E)  Only Chris would be responsible Ed's misapplication of the customers' money.

A sole proprietor is free from regulatory control.

The ratification of a contract by the principal must be done in writing.

A partner's liability for the torts of her partners extends beyond those committed in the course of the business.

Distinguish between the actual and the apparent authority of an agent.

Information that comes to the agent because of his position as agent must be passed on to the third party.

Which of the following is incorrect with respect to the responsibilities of partners to each other?

Apparent authority is the authority the agent has based on what the principal has led the third party to believe.

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

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

A sole proprietor is free from regulatory control.

The ratification of a contract by the principal must be done in writing.

A partner's liability for the torts of her partners extends beyond those committed in the course of the business.

Distinguish between the actual and the apparent authority of an agent.

Information that comes to the agent because of his position as agent must be passed on to the third party.

Which of the following is incorrect with respect to the responsibilities of partners to each other?

Apparent authority is the authority the agent has based on what the principal has led the third party to believe.

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

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