Question 1

An agency can terminate once its purpose is achieved.

Accepted Answer

A) True 
 B)False

Question 2

Chuck hires Danielle, a real estate broker, to act as his agent to sell his land for $150,000. Oil is discovered beneath the land, causing its market value to increase considerably. The agency agreement is likely

Accepted Answer

A)  ​continued with a proportionate increase in Danielle's sales commission. 
B)  ​continued until Danielle tells prospective buyers of the discovery. 
C)  ​terminated by act of the parties. 
D)  ​terminated by operation of law. 
A)  ​continued with a proportionate increase in Danielle's sales commission. 
B)  ​continued until Danielle tells prospective buyers of the discovery. 
C)  ​terminated by act of the parties. 
D)  ​terminated by operation of law.

Question 3

Apparent authority arises from what the principal makes clear to the agent.

Accepted Answer

A) True 
 B)False

Question 4

Orin hires Pat, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Pat is Orin's agent​

Accepted Answer

A)  ​until Orin's insurer pays Pat's commission. 
B)  ​until the destroyed house is sold. 
C)  ​until the destroyed house is rebuilt and sold. 
D)  ​no more. 
A)  ​until Orin's insurer pays Pat's commission. 
B)  ​until the destroyed house is sold. 
C)  ​until the destroyed house is rebuilt and sold. 
D)  ​no more.

Question 5

A principal cannot be estopped from denying that an agent has authority.

Accepted Answer

A) True 
 B)False

Question 6

Norton grants an ordinary power of attorney to Olena to locate potential real estate investment opportunities on Norton's behalf. This power will terminate on Norton's​

Accepted Answer

A)  ​taking advantage of one of the investment opportunities. 
B)  ​death or incapacity. 
C)  ​sixty-fifth birthday. 
D)  ​hiring an actual attorney to exercise the power granted to Olena. 
A)  ​taking advantage of one of the investment opportunities. 
B)  ​death or incapacity. 
C)  ​sixty-fifth birthday. 
D)  ​hiring an actual attorney to exercise the power granted to Olena.

Question 7

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort. The agency will terminate​

Accepted Answer

A)  ​after the condos have been sold. 
B)  ​if the prices of the condos must be reduced to sell them. 
C)  ​once Bayou Development obtains insurance to cover the property. 
D)  ​when Bayou Development pays Coastal Brokerage its first commission. 
A)  ​after the condos have been sold. 
B)  ​if the prices of the condos must be reduced to sell them. 
C)  ​once Bayou Development obtains insurance to cover the property. 
D)  ​when Bayou Development pays Coastal Brokerage its first commission.

Question 8

Lena is a salesperson for Musical Instruments, Inc. She tells Nayda, a customer, that an instrument has a certain quality when, as Lena knows, it does not. In reliance, Nayda buys the instrument. Liable for this misrepresentation is​

Accepted Answer

A)  ​no one. 
B)  ​Lena. 
C)  ​Musical Instruments. 
D)  ​Nayda. 
A)  ​no one. 
B)  ​Lena. 
C)  ​Musical Instruments. 
D)  ​Nayda.

Question 9

If a principal is undisclosed, the agent may be liable to the principal for a third party's nonperformance of a contract.

Accepted Answer

A) True 
 B)False

Question 10

An agent's implied authority cannot be implied by custom.

Accepted Answer

A) True 
 B)False

Question 11

Avis is an officer of Budget Building Corporation. With respect to binding Budget to contracts, Avis's authority​

Accepted Answer

A)  ​may be actual or apparent. 
B)  ​must be actual and apparent. 
C)  ​must be actual and not apparent. 
D)  ​cannot be actual or apparent. 
A)  ​may be actual or apparent. 
B)  ​must be actual and apparent. 
C)  ​must be actual and not apparent. 
D)  ​cannot be actual or apparent.

Question 12

Clark hires Dion to act as his agent to purchase Expo Sports Arena, Inc. Clark tells Dion to reveal that he is buying the firm and its assets on behalf of a third party and to tell the seller who that third party is. Clark is​

Accepted Answer

A)  ​a disclosed principal. 
B)  ​not a principal. 
C)  ​an undisclosed principal. 
D)  ​a partially disclosed principal. 
A)  ​a disclosed principal. 
B)  ​not a principal. 
C)  ​an undisclosed principal. 
D)  ​a partially disclosed principal.

Question 13

Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on​

Accepted Answer

A)  ​Olive to Quality for misrepresenting her authority. 
B)  ​Precision to Quality for not ratifying the contract. 
C)  ​Quality to Precision for entering into an unauthorized contract. 
D)  ​Precision to Olive for not ratifying the contract. 
A)  ​Olive to Quality for misrepresenting her authority. 
B)  ​Precision to Quality for not ratifying the contract. 
C)  ​Quality to Precision for entering into an unauthorized contract. 
D)  ​Precision to Olive for not ratifying the contract.

Question 14

The equal dignity rule requires that if a contract entered into by an agent is or must be in writing, the agent's authority must also be in writing.

Accepted Answer

A) True 
 B)False

Question 15

A disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

Accepted Answer

A) True 
 B)False

Question 16

A principal's ratification of an agent's unauthorized act must be express.

Accepted Answer

A) True 
 B)False

Question 17

Even if a principal ratifies a contract without knowing all of the facts, the principal cannot later rescind the contract.

Accepted Answer

A) True 
 B)False

Question 18

An agent has the implied authority to do what is reasonably necessary to carry out express authority.

Accepted Answer

A) True 
 B)False

Question 19

For an agent's implied authority to be effective, a principal must confirm it in writing.

Accepted Answer

A) True 
 B)False

Question 20

An undisclosed principal is not liable to a third party for a contract made by an agent.

Accepted Answer

A) True 
 B)False

Exam 10: Agency Liability and Termination

An agency can terminate once its purpose is achieved.

Chuck hires Danielle, a real estate broker, to act as his agent to sell his land for $150,000. Oil is discovered beneath the land, causing its market value to increase considerably. The agency agreement is likely

Apparent authority arises from what the principal makes clear to the agent.

Orin hires Pat, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Pat is Orin's agent​

A principal cannot be estopped from denying that an agent has authority.

Norton grants an ordinary power of attorney to Olena to locate potential real estate investment opportunities on Norton's behalf. This power will terminate on Norton's​

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort. The agency will terminate​

Lena is a salesperson for Musical Instruments, Inc. She tells Nayda, a customer, that an instrument has a certain quality when, as Lena knows, it does not. In reliance, Nayda buys the instrument. Liable for this misrepresentation is​

If a principal is undisclosed, the agent may be liable to the principal for a third party's nonperformance of a contract.

An agent's implied authority cannot be implied by custom.

Avis is an officer of Budget Building Corporation. With respect to binding Budget to contracts, Avis's authority​

Clark hires Dion to act as his agent to purchase Expo Sports Arena, Inc. Clark tells Dion to reveal that he is buying the firm and its assets on behalf of a third party and to tell the seller who that third party is. Clark is​

Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on​

The equal dignity rule requires that if a contract entered into by an agent is or must be in writing, the agent's authority must also be in writing.

A disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

A principal's ratification of an agent's unauthorized act must be express.

Even if a principal ratifies a contract without knowing all of the facts, the principal cannot later rescind the contract.

An agent has the implied authority to do what is reasonably necessary to carry out express authority.

For an agent's implied authority to be effective, a principal must confirm it in writing.

An undisclosed principal is not liable to a third party for a contract made by an agent.

Business Ethics

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All Forms of Partnerships

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Corporate Formation and Financing

Corporate Directors, Officers, and Shareholders

Securities Law and Corporate Governance

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Employment Discrimination

The Formation of Sales and Lease Contracts

Performance and Breach of Sales and Lease Contracts

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Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Banking in the Digital Age

Creditors Rights and Remedies

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Digital Update:should Employees Have a Right of Disconnecting

Digital Update: Revenge Porn and Invasion of Privacy

Digital Update: Taxing Web Purchases

Ethics Today:what Are an Attorneys Responsibilities for Protecting Data Stored in a Cloud

Digital Update:the Exploding World of Digital Property

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Orin hires Pat, a real estate broker, to sell her oceanfront house. The house is destroyed in a hurricane before being sold. Pat is Orin's agent

Norton grants an ordinary power of attorney to Olena to locate potential real estate investment opportunities on Norton's behalf. This power will terminate on Norton's

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort. The agency will terminate

Lena is a salesperson for Musical Instruments, Inc. She tells Nayda, a customer, that an instrument has a certain quality when, as Lena knows, it does not. In reliance, Nayda buys the instrument. Liable for this misrepresentation is

Avis is an officer of Budget Building Corporation. With respect to binding Budget to contracts, Avis's authority

Clark hires Dion to act as his agent to purchase Expo Sports Arena, Inc. Clark tells Dion to reveal that he is buying the firm and its assets on behalf of a third party and to tell the seller who that third party is. Clark is

Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on