Question 1

A principal whose identity is concealed from the third parties with whom the agent is dealing is known as ________.

Accepted Answer

an undiscl

Question 2

Explain how a person's status as a limited partner could be lost.

Accepted Answer

If the limited partner fails to register

Question 3

Paul and Laurie both worked at the mall. They often discussed how frequently they made decisions for customers when helping them pick out gifts. They concluded that knowing the merchandise in all the stores as well as they did, they could make a lot of money by doing Christmas shopping for customers. They discussed the idea at length. Laurie's mom, a buyer for a department store in the mall, referred some customers to them. With more and more customers, they wanted to quit their jobs and devote more time to this new business. Laurie's mom agreed to give them $2000, but doesn't want her liability to go beyond that. On these facts, which of the following is true?

Accepted Answer

A)  Laurie's mother cannot be a limited partner because it takes four or more general partners before a firm can have a limited partner. 
B)  As long as Laurie's mother does not buy on behalf of the customers hiring Paul and Laurie, she can continue to provide services to them, such as sending them customers, and can advise them on marketing and other management problems without losing her limited-partner status. 
C)  If Laurie's mom does not follow the statutory provisions governing limited partnerships, she could be deemed a general partner and liable for claims beyond her $2000 investment. 
D)  The only way to limit one's liability is to incorporate. 
E)  To protect themselves, all of them should be limited partners. 
A)  Laurie's mother cannot be a limited partner because it takes four or more general partners before a firm can have a limited partner. 
B)  As long as Laurie's mother does not buy on behalf of the customers hiring Paul and Laurie, she can continue to provide services to them, such as sending them customers, and can advise them on marketing and other management problems without losing her limited-partner status. 
C)  If Laurie's mom does not follow the statutory provisions governing limited partnerships, she could be deemed a general partner and liable for claims beyond her $2000 investment. 
D)  The only way to limit one's liability is to incorporate. 
E)  To protect themselves, all of them should be limited partners.

Question 4

Joe is a salesman for Harry's Fine Cars Ltd. He had been told specifically that he had no authority to make any sale, take a trade-in, or otherwise deal with the vehicles without the manager's express approval of every deal. Sam, a customer, came in wanting to buy a used Cadillac and agreed to pay the $16,000 asking price. Unfortunately, the manager had left the lot, and so Joe took it upon himself to write up the agreement. When the manager returned, he liked the deal and realized that the customer might change his mind when he realized that the salesman didn't have the authority to bind the seller in contract. Under these circumstances, what could the manager of the car lot do?

Accepted Answer

He could ratify the contract,

Question 5

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is False?

Accepted Answer

A)  A partner is an agent for the firm and the other partner, and thus Matt would be liable for a contract made by Frank on behalf of the partnership if the partnership funds could not cover it. 
B)  Matt could be liable for losses suffered by a client whose funds were misappropriated by Frank even if he (Matt) were not aware of the misappropriation and had no part in it. 
C)  A partner is liable to the full extent of his personal fortune if an employee of the firm was negligent in the course of his duties and there were insufficient partnership funds to cover the resulting loss. 
D)  A partner is not liable for any partnership debt that was incurred after he left as long as he gave notice in writing to his partner that he was retiring from the partnership. 
E)  A partner has unlimited liability for any loss suffered by the partnership because of a negligent act by one of the partners if the partnership funds are insufficient to cover the loss. 
A)  A partner is an agent for the firm and the other partner, and thus Matt would be liable for a contract made by Frank on behalf of the partnership if the partnership funds could not cover it. 
B)  Matt could be liable for losses suffered by a client whose funds were misappropriated by Frank even if he (Matt) were not aware of the misappropriation and had no part in it. 
C)  A partner is liable to the full extent of his personal fortune if an employee of the firm was negligent in the course of his duties and there were insufficient partnership funds to cover the resulting loss. 
D)  A partner is not liable for any partnership debt that was incurred after he left as long as he gave notice in writing to his partner that he was retiring from the partnership. 
E)  A partner has unlimited liability for any loss suffered by the partnership because of a negligent act by one of the partners if the partnership funds are insufficient to cover the loss.

Question 6

Norma and Janet decided to form a partnership for selling gourmet picnic baskets. To raise sufficient capital, they convinced their mothers to invest $5000 each as limited partners. Norma's mother was an experienced restaurateur and watched the business with great interest. On several occasions, she advised them on the business and contacted old business associates to buy surplus stock. She even filled in taking orders in the office when needed. A customer who was made ill by contaminated food from a tin can supplied in one basket sued. What would be the liability, if any, of the mothers?

Accepted Answer

A)  Janet's mother would be liable for $10,000, twice the amount invested, because she failed to take part in the management of the business. 
B)  A limited partner has her liability limited to the amount of her initial investment; therefore, neither mother has any further liability. 
C)  Both mothers would have unlimited liability because they contributed money but not services as required. 
D)  Norma's mother would have unlimited liability because she took part in the management of the business and therefore became a general partner. 
E)  Because one mother lost her limited liability status, they both do. 
A)  Janet's mother would be liable for $10,000, twice the amount invested, because she failed to take part in the management of the business. 
B)  A limited partner has her liability limited to the amount of her initial investment; therefore, neither mother has any further liability. 
C)  Both mothers would have unlimited liability because they contributed money but not services as required. 
D)  Norma's mother would have unlimited liability because she took part in the management of the business and therefore became a general partner. 
E)  Because one mother lost her limited liability status, they both do.

Question 7

Discuss how a partnership arrangement may be brought to an end and the effect of dissolution.

Accepted Answer

Students should note that a partnership

Question 8

Which of the following statements is true with respect to the obligations in a partnership relationship?

Accepted Answer

A)  In the absence of agreement to the contrary, when one of the partners is injured, the partnership is dissolved. 
B)  In the absence of agreement to the contrary, the partnership is dissolved when one of the partners serves the others with notice to the effect that he wishes to continue. 
C)  When a partnership is dissolved, each partner can only be forced by a creditor to pay a portion of the debt equal to his share of the capital contributed. 
D)  When one of the partners owes a personal debt not associated with the partnership, that creditor has a claim on his portion of the assets of the partnership. 
E)  A partnership can be dissolved only by court order. 
A)  In the absence of agreement to the contrary, when one of the partners is injured, the partnership is dissolved. 
B)  In the absence of agreement to the contrary, the partnership is dissolved when one of the partners serves the others with notice to the effect that he wishes to continue. 
C)  When a partnership is dissolved, each partner can only be forced by a creditor to pay a portion of the debt equal to his share of the capital contributed. 
D)  When one of the partners owes a personal debt not associated with the partnership, that creditor has a claim on his portion of the assets of the partnership. 
E)  A partnership can be dissolved only by court order.

Question 9

Joe and Sam were in business school together. After they graduated, they decided to open an ice-cream store in a mall together. They had skipped the classes where they were taught about different methods and forms of carrying on business and so gave no thought as to how they would structure their relationship. Which of the following is true with respect to the legal positions of Joe and Sam?

Accepted Answer

A)  Sam and Joe are not in a partnership since they have not specifically agreed to be. 
B)  If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, he must share any profits he makes with Joe. 
C)  If Sam were to find a great deal on anchovy ice-cream and purchased 2000 litres of it, only Sam would be liable for the debt incurred as a result of the purchase. 
D)  If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, Joe would be liable for any losses he suffered along with Sam. 
E)  If a customer were injured because of poorly kept food and Sam did not have the assets to pay his half, Joe would only have to pay for his half of the damages suffered. 
A)  Sam and Joe are not in a partnership since they have not specifically agreed to be. 
B)  If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, he must share any profits he makes with Joe. 
C)  If Sam were to find a great deal on anchovy ice-cream and purchased 2000 litres of it, only Sam would be liable for the debt incurred as a result of the purchase. 
D)  If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, Joe would be liable for any losses he suffered along with Sam. 
E)  If a customer were injured because of poorly kept food and Sam did not have the assets to pay his half, Joe would only have to pay for his half of the damages suffered.

Question 10

For a partnership to exist, something more than a single joint activity is required.

Accepted Answer

A) True 
 B)False

Question 11

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Accepted Answer

Jones is in the business of practising l

Question 12

Which of the following is true with regard to partnership?

Accepted Answer

A)  No partnership can be formed unless the parties intended to create a partnership. 
B)  Sharing gross receipts is sufficient evidence of the existence of a partnership. 
C)  The terms of the Partnership Act will be implied in a partnership agreement that includes provisions on the same point. 
D)  A general partner is not an agent of the firm and the other partners. 
E)  A limited partnership is an arrangement in which a partner may limit liability to his capital contribution. 
A)  No partnership can be formed unless the parties intended to create a partnership. 
B)  Sharing gross receipts is sufficient evidence of the existence of a partnership. 
C)  The terms of the Partnership Act will be implied in a partnership agreement that includes provisions on the same point. 
D)  A general partner is not an agent of the firm and the other partners. 
E)  A limited partnership is an arrangement in which a partner may limit liability to his capital contribution.

Question 13

Joe was a chauffeur, working for Sam. When Joe was taking the car in to have it serviced, he saw a brand new BMW and bought it on behalf of Sam. When he took it home, Sam was upset, explained that he didn't want a new BMW, and told him to take it back. Joe persuaded him to take it for a test drive first. Explain the legal position of the parties.

Accepted Answer

When the principal took the ca

Question 14

Which of the following is incorrect with respect to the creation of a partnership?

Accepted Answer

A)  An important indication as to whether a partnership exists is the sharing of the profits of the business activity. 
B)  The business activity must be continuing in order for it to indicate the existence of a partnership. 
C)  A partnership can only be created with the consent of the parties. 
D)  The common method of creating a partnership is by agreement. 
E)  The duties and obligations of partners to each other can be modified by agreement. 
A)  An important indication as to whether a partnership exists is the sharing of the profits of the business activity. 
B)  The business activity must be continuing in order for it to indicate the existence of a partnership. 
C)  A partnership can only be created with the consent of the parties. 
D)  The common method of creating a partnership is by agreement. 
E)  The duties and obligations of partners to each other can be modified by agreement.

Question 15

Although Jason had participated in the flower auction for the last nine years as an agent for Thos. Holt's Ltd. (Holt) with the authority to buy whatever he felt the store needed, this day he was given express instructions to buy only cut flowers. When flats of young camellia bushes with a rare gold flower were being sold, Jason bought them on behalf of the company. Which of the following is true?

Accepted Answer

A)  Holt is not bound by the contract because Jason's authority was expressly restricted. 
B)  Holt is not bound since Holt didn't ratify the contract. 
C)  Holt is not bound by the contract because Jason is in breach of his agency agreement. 
D)  Holt is estopped from denying Jason's authority. 
E)  The key to determining whether or not Holt is bound by the contract is this: in the circumstances, should the auctioneer have confirmed with Holt the extent of Jason's authority? 
A)  Holt is not bound by the contract because Jason's authority was expressly restricted. 
B)  Holt is not bound since Holt didn't ratify the contract. 
C)  Holt is not bound by the contract because Jason is in breach of his agency agreement. 
D)  Holt is estopped from denying Jason's authority. 
E)  The key to determining whether or not Holt is bound by the contract is this: in the circumstances, should the auctioneer have confirmed with Holt the extent of Jason's authority?

Question 16

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

Accepted Answer

A) True 
 B)False

Question 17

Joe was a lawyer and agreed to pay Sam, a banker, 25% of any fees that he received as a result of mortgage referral business directed his way by Sam. Because of Joe's carelessness, one of the customers referred to him by Sam lost his property. The customer sued both Joe and Sam. Explain the likelihood of his success.

Accepted Answer

No partnership has been create

Question 18

Which of the following is correct with respect to the agency relationship?

Accepted Answer

A)  Agents are those who act on behalf of others but are not employees. 
B)  The agency relationship must be created by contract. 
C)  No agency can be created without the consent of the principal. 
D)  For an agency contract to be valid, it must be in writing. 
E)  An agency agreement in writing and under seal is called a power of attorney. 
A)  Agents are those who act on behalf of others but are not employees. 
B)  The agency relationship must be created by contract. 
C)  No agency can be created without the consent of the principal. 
D)  For an agency contract to be valid, it must be in writing. 
E)  An agency agreement in writing and under seal is called a power of attorney.

Question 19

Distinguish between a sole proprietorship and a corporation.

Accepted Answer

The sole proprietorship is sim

Question 20

Distinguish between a partnership and a corporation.

Accepted Answer

A partnership involves two or more peopl

A principal whose identity is concealed from the third parties with whom the agent is dealing is known as ________.

Explain how a person's status as a limited partner could be lost.

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is False?

Discuss how a partnership arrangement may be brought to an end and the effect of dissolution.

Which of the following statements is true with respect to the obligations in a partnership relationship?

For a partnership to exist, something more than a single joint activity is required.

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Which of the following is true with regard to partnership?

Which of the following is incorrect with respect to the creation of a partnership?

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

Which of the following is correct with respect to the agency relationship?

Distinguish between a sole proprietorship and a corporation.

Distinguish between a partnership and a corporation.

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 principal whose identity is concealed from the third parties with whom the agent is dealing is known as ________.

Explain how a person's status as a limited partner could be lost.

Frank asked Matt to join him in a business venture. Matt has heard that partnership could result in some harsh consequences. Which of the following statements that Matt has heard about the liability of partners is False?

Discuss how a partnership arrangement may be brought to an end and the effect of dissolution.

Which of the following statements is true with respect to the obligations in a partnership relationship?

For a partnership to exist, something more than a single joint activity is required.

Jones is a partner in a law firm in a small town and he also does legal work out of his home in the evening to earn extra income for himself. Explain the rights of his partners in this situation.

Which of the following is true with regard to partnership?

Which of the following is incorrect with respect to the creation of a partnership?

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

Which of the following is correct with respect to the agency relationship?

Distinguish between a sole proprietorship and a corporation.

Distinguish between a partnership and a corporation.

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