Question 1

An agency relationship must be based on an express or implied agreement that the agent will act for principal and that the principal agrees to have the agent so act.

Accepted Answer

A) True 
 B)False

Question 2

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Accepted Answer

A) apparent authority. 
B) express authority. 
C) implied authority. 
D) no authority. 
A) apparent authority. 
B) express authority. 
C) implied authority. 
D) no authority.

Question 3

Gayla asks Jessie to contract with Jessie's high school classmates to babysit for Gayla's new baby.Jessie orally agrees to do so.This is

Accepted Answer

A) an agency by agreement. 
B) an agency by estoppel. 
C) anagency by ratification. 
D) not the creation of an agency relationship. 
A) an agency by agreement. 
B) an agency by estoppel. 
C) anagency by ratification. 
D) not the creation of an agency relationship.

Question 4

An independent contractor is an employee.

Accepted Answer

A) True 
 B)False

Question 5

A principal owes an agent a duty of compensation.

Accepted Answer

A) True 
 B)False

Question 6

Generally,the agent owes the principal no duties.

Accepted Answer

A) True 
 B)False

Question 7

A disclosed principal is a principal whose identity is not known by the third party at the time the contract is made by the agent.

Accepted Answer

A) True 
 B)False

Question 8

Under the doctrine of respondeat superior,an agent is liable for the principal's negligence.

Accepted Answer

A) True 
 B)False

Question 9

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo.Cody does not ratify the contract.Later,Dik tries to enforce the deal.This attempt will be

Accepted Answer

A) partly successful. 
B) partly unsuccessful. 
C) totally successful. 
D) totally unsuccessful. 
A) partly successful. 
B) partly unsuccessful. 
C) totally successful. 
D) totally unsuccessful.

Question 10

Authority declared in clear,direct,definite terms is express authority.

Accepted Answer

A) True 
 B)False

Question 11

Lather Up Soap Products Company grants its agent Kathy an exclusive terri-tory in which to sell Lather Up products.The firm cannot compete with Kathy in that territory under the principal's duty of

Accepted Answer

A) avoidance. 
B) cooperation. 
C) indemnification. 
D) reimbursement 
A) avoidance. 
B) cooperation. 
C) indemnification. 
D) reimbursement

Question 12

Ozzy is an officer of Prudent Financial Corporation.Ozzy serves in a representative capacity for Prudent Financial's owners.With respect to binding Prudent Financial to contracts,Ozzy is

Accepted Answer

A) an agent and has the authority. 
B) an agent but does not have the authority. 
C) not an agent and does not have the authority. 
D) not an agent but does have the authority. 
A) an agent and has the authority. 
B) an agent but does not have the authority. 
C) not an agent and does not have the authority. 
D) not an agent but does have the authority.

Question 13

George and James create an agency relationship to facilitate the sale of illegal narcotics.This agency relationship

Accepted Answer

A) is illegal. 
B) is legal. 
C) will be recognized by some states,but not others. 
D) can exist,but will be subject to sanctions for illegal activity. 
A) is illegal. 
B) is legal. 
C) will be recognized by some states,but not others. 
D) can exist,but will be subject to sanctions for illegal activity.

Question 14

When an agency relationship is terminated,the principal has a duty to personally notify third parties who knew of its existence.

Accepted Answer

A) True 
 B)False

Question 15

Treadwell Tire Manufacturing Company employs Uri as an agent.To terminate Uri's authority,Treadwell must notify

Accepted Answer

A) only third parties who are aware of the agency relationship 
B) the public generally. 
C) Uri and any third parties who are aware of the agency relationship. 
D) Uri only. 
A) only third parties who are aware of the agency relationship 
B) the public generally. 
C) Uri and any third parties who are aware of the agency relationship. 
D) Uri only.

Question 16

An agency relationship can only be formed with a written agreement.

Accepted Answer

A) True 
 B)False

Question 17

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

Accepted Answer

A) any transaction causing a loss to Miklos. 
B) Miklos's death or incapacity. 
C) Miklos's sixty-fifth birthday. 
D) Nathalie's handling of one of each stipulated transaction. 
A) any transaction causing a loss to Miklos. 
B) Miklos's death or incapacity. 
C) Miklos's sixty-fifth birthday. 
D) Nathalie's handling of one of each stipulated transaction.

Question 18

An agent has a duty to keep and make available to the principal an account of all property and funds received and paid out on behalf of the principal.

Accepted Answer

A) True 
 B)False

Question 19

Joli,acting within the scope of her authority for the Cake Bake Shop,contracts with Valley View Berry Farms to buy an assortment of fruit.Cake Bake is liable on the contract,and Joli is not,if Cake Bake is

Accepted Answer

A) a disclosed principal. 
B) a partially disclosed principal. 
C) an undisclosed principal. 
D) an apparent agent. 
A) a disclosed principal. 
B) a partially disclosed principal. 
C) an undisclosed principal. 
D) an apparent agent.

Question 20

A principal has the right to control an agent's conduct in matters entrusted to the agent.

Accepted Answer

A) True 
 B)False

Exam 21: Agency Relationships

An agency relationship must be based on an express or implied agreement that the agent will act for principal and that the principal agrees to have the agent so act.

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has

Gayla asks Jessie to contract with Jessie's high school classmates to babysit for Gayla's new baby.Jessie orally agrees to do so.This is

An independent contractor is an employee.

A principal owes an agent a duty of compensation.

Generally,the agent owes the principal no duties.

A disclosed principal is a principal whose identity is not known by the third party at the time the contract is made by the agent.

Under the doctrine of respondeat superior,an agent is liable for the principal's negligence.

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo.Cody does not ratify the contract.Later,Dik tries to enforce the deal.This attempt will be

Authority declared in clear,direct,definite terms is express authority.

Lather Up Soap Products Company grants its agent Kathy an exclusive terri-tory in which to sell Lather Up products.The firm cannot compete with Kathy in that territory under the principal's duty of

Ozzy is an officer of Prudent Financial Corporation.Ozzy serves in a representative capacity for Prudent Financial's owners.With respect to binding Prudent Financial to contracts,Ozzy is

George and James create an agency relationship to facilitate the sale of illegal narcotics.This agency relationship

When an agency relationship is terminated,the principal has a duty to personally notify third parties who knew of its existence.

Treadwell Tire Manufacturing Company employs Uri as an agent.To terminate Uri's authority,Treadwell must notify

An agency relationship can only be formed with a written agreement.

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

An agent has a duty to keep and make available to the principal an account of all property and funds received and paid out on behalf of the principal.

Joli,acting within the scope of her authority for the Cake Bake Shop,contracts with Valley View Berry Farms to buy an assortment of fruit.Cake Bake is liable on the contract,and Joli is not,if Cake Bake is

A principal has the right to control an agent's conduct in matters entrusted to the agent.

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