Question 1

When the principal ratifies the act of the unauthorized person,such ratification does not release the unauthorized person from liability,since he or she acted without authority.

Accepted Answer

A) True 
 B)False

Question 2

The usual method of creating an agency is by:

Accepted Answer

A)  express authorization. 
B)  conduct. 
C)  operation of law. 
D)  ratification. 
A)  express authorization. 
B)  conduct. 
C)  operation of law. 
D)  ratification.

Question 3

A principal may ratify an action taken by an agent that the principal would not have been capable of authorizing at the time that the action was taken.

Accepted Answer

A) True 
 B)False

Question 4

Barnes agrees with Morgan to enter into the management of a new subdivision of residential housing.Morgan appoints Barnes as his manager for the duration of the development program.During the course of the construction,Barnes decides to use funds specified for the subdivision for an office space project that Barnes alone has been interested in completing.Morgan is very angry on learning of Barnes' actions and terminates the agency.Barnes insists that the agency cannot be terminated in this manner.Is Barnes correct?

Accepted Answer

No.Morgan hired Barnes to manage a new s

Question 5

An agent's duties must be expressly stated in the agency agreement and may not be implied from the principal's words or conduct.

Accepted Answer

A) True 
 B)False

Question 6

A __________ agent is authorized by the principal to handle a definite business transaction or to do a specific act.

Accepted Answer

A)  special 
B)  general 
C)  secret 
D)  universal 
A)  special 
B)  general 
C)  secret 
D)  universal

Question 7

An agency coupled with an interest is an exception to the general rule regarding termination of the agency and the agent cannot be discharged or fired before the expiration of the interest.

Accepted Answer

A) True 
 B)False

Question 8

An agent is under a duty to obey:

Accepted Answer

A)  all instruction given by the third party. 
B)  all lawful instructions given by the principal. 
C)  all instructions given by the principal. 
D)  none of the above,since "obedience" is not an obligation of the agent. 
A)  all instruction given by the third party. 
B)  all lawful instructions given by the principal. 
C)  all instructions given by the principal. 
D)  none of the above,since "obedience" is not an obligation of the agent.

Question 9

Which of the following is not a condition necessary for ratification?

Accepted Answer

A)  The agent must have purported to act on behalf of or as an agent for the identified principal. 
B)  The third party benefiting from the ratification must give consideration for the ratification. 
C)  The principal must have been capable of authorizing the act both at the time of the act and at the time it was ratified. 
D)  The principal must have full knowledge of all material facts. 
A)  The agent must have purported to act on behalf of or as an agent for the identified principal. 
B)  The third party benefiting from the ratification must give consideration for the ratification. 
C)  The principal must have been capable of authorizing the act both at the time of the act and at the time it was ratified. 
D)  The principal must have full knowledge of all material facts.

Question 10

Placing property in the possession of another gives that person apparent authority to sell the property.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true?

Accepted Answer

A)  An agent has the power to contract on behalf of a principal. 
B)  An employee generally does not have the power to contract on behalf of the employer. 
C)  An independent contractor controls the work he or she performs. 
D)  All of the above are true. 
A)  An agent has the power to contract on behalf of a principal. 
B)  An employee generally does not have the power to contract on behalf of the employer. 
C)  An independent contractor controls the work he or she performs. 
D)  All of the above are true.

Question 12

Agency is a relationship by which the principal is authorized to act on behalf of an agent in negotiating and making contracts with third persons.

Accepted Answer

A) True 
 B)False

Question 13

A "right to control" test determines whether an individual is an agent,an employee,or an independent contractor.

Accepted Answer

A) True 
 B)False

Question 14

A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance.

Accepted Answer

A) True 
 B)False

Question 15

For a principal to ratify the actions of an agent,all that is necessary is that the principal express the intention to ratify.

Accepted Answer

A) True 
 B)False

Question 16

In performing agency duties,the agent must exercise the care that a reasonably prudent person would exercise under the same circumstances.

Accepted Answer

A) True 
 B)False

Question 17

The employer of an independent contractor does not have control over the performance of the work by the independent contractor.

Accepted Answer

A) True 
 B)False

Question 18

A person who has knowledge of a limitation on an agent's authority cannot disregard that limitation.

Accepted Answer

A) True 
 B)False

Question 19

For ratification to occur,the agent must have purported to act on behalf of,or as agent for,the identified principal.

Accepted Answer

A) True 
 B)False

Question 20

The scope of an agent's authority may be determined from the:

Accepted Answer

A)  express words of the principal. 
B)  words or deeds of the principal. 
C)  customs of the trade or business. 
D)  all of the above. 
A)  express words of the principal. 
B)  words or deeds of the principal. 
C)  customs of the trade or business. 
D)  all of the above.

Exam 37: Agency

When the principal ratifies the act of the unauthorized person,such ratification does not release the unauthorized person from liability,since he or she acted without authority.

The usual method of creating an agency is by:

A principal may ratify an action taken by an agent that the principal would not have been capable of authorizing at the time that the action was taken.

An agent's duties must be expressly stated in the agency agreement and may not be implied from the principal's words or conduct.

A __________ agent is authorized by the principal to handle a definite business transaction or to do a specific act.

An agency coupled with an interest is an exception to the general rule regarding termination of the agency and the agent cannot be discharged or fired before the expiration of the interest.

An agent is under a duty to obey:

Which of the following is not a condition necessary for ratification?

Placing property in the possession of another gives that person apparent authority to sell the property.

Which of the following is true?

Agency is a relationship by which the principal is authorized to act on behalf of an agent in negotiating and making contracts with third persons.

A "right to control" test determines whether an individual is an agent,an employee,or an independent contractor.

A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance.

For a principal to ratify the actions of an agent,all that is necessary is that the principal express the intention to ratify.

In performing agency duties,the agent must exercise the care that a reasonably prudent person would exercise under the same circumstances.

The employer of an independent contractor does not have control over the performance of the work by the independent contractor.

A person who has knowledge of a limitation on an agent's authority cannot disregard that limitation.

For ratification to occur,the agent must have purported to act on behalf of,or as agent for,the identified principal.

The scope of an agent's authority may be determined from the:

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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