Question 1

Explain what must be done to create a limited partnership.

Accepted Answer

Limited partners invest in the partnersh

Question 2

A salesperson in a men's clothing store has heard rumours that the store is going out of business.The boss is out of the store when a customer who has heard the same thing comes in and offers to purchase the entire stock,the display cases,and the fixtures.The salesperson accepts on behalf of the employer.Discuss the legal position of the parties.

Accepted Answer

Unless the boss has given specific autho

Question 3

Limited liability can be the most significant disadvantage of the sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 4

When an agent acts beyond the specific authority given by the principal,that action will not be binding on the principal.

Accepted Answer

A) True 
 B)False

Question 5

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome,if partnership is chosen as the method of carrying on business.

Accepted Answer

Partners have unlimited liability for th

Question 6

Joe and Sam were in business school together in college,and after they graduated 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 purchase 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 purchase 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 7

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Accepted Answer

A) True 
 B)False

Question 8

Usually,the name of the business must be registered if it is different from the sole proprietor's name,and a licence to operate must be obtained from the appropriate level of government.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is incorrect with respect to the law of partnership?

Accepted Answer

A)  The admission of a new partner requires the consent of all the partners. 
B)  All partners have the right to inspect all partnership records. 
C)  The death or insanity of one of the partners will dissolve the partnership. 
D)  A partnership can always be brought to an end by court order, no matter what the partnership agreement says. 
E)  Limited partners are limited in the sense that they cannot take part in the management of the partnership; otherwise, they are like any other partners. 
A)  The admission of a new partner requires the consent of all the partners. 
B)  All partners have the right to inspect all partnership records. 
C)  The death or insanity of one of the partners will dissolve the partnership. 
D)  A partnership can always be brought to an end by court order, no matter what the partnership agreement says. 
E)  Limited partners are limited in the sense that they cannot take part in the management of the partnership; otherwise, they are like any other partners.

Question 10

In LeRuyet v.Stenner,Stenner defrauded LeRuyet,who gave him money to purchase a Great West annuity.LeRuyet claimed that Great West was vicariously liable.What did the Court determine?

Accepted Answer

A)  The Court dismissed the claim of apparent authority because there were no representations made by Great West that would lead a reasonable person to assume Stenner acted as an agent. 
B)  The Court held Great West vicariously liable because the defrauded victim had no way to recover the money from Stenner directly. 
C)  The Court determined that Stenner had apparent authority to act for Great West, despite the fact that Great West had made no representations to that effect. 
D)  The Court confirmed that the principle of apparent authority no longer exists; only actual authority will suffice. 
E)  The Court held that the test used to determine the existence of authority is whether the victim actually believed the person in question was a representative of another. 
A)  The Court dismissed the claim of apparent authority because there were no representations made by Great West that would lead a reasonable person to assume Stenner acted as an agent. 
B)  The Court held Great West vicariously liable because the defrauded victim had no way to recover the money from Stenner directly. 
C)  The Court determined that Stenner had apparent authority to act for Great West, despite the fact that Great West had made no representations to that effect. 
D)  The Court confirmed that the principle of apparent authority no longer exists; only actual authority will suffice. 
E)  The Court held that the test used to determine the existence of authority is whether the victim actually believed the person in question was a representative of another.

Question 11

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 12

Joe,Harry,and Sam opened up a partnership supplying accounting services to the general public in a small town.Harry and his wife,unknown to Joe and Sam,also carried on a mail-order business at night that had nothing to do with accounting.He would,however,often come into the partnership office to use the photocopier and computer for correspondence related to his mail-order business.Joe and Sam found out about this activity when Harry forgot to erase one of the files on the computer one night.Explain the legal position of Harry.

Accepted Answer

Harry has violated his fiducia

Question 13

Joe and Sam set up an import/export business in partnership,but they needed extra money.Harry was invited to invest as a limited partner.Unfortunately,the business began to lose money because of the poor business sense of Joe and Sam.Harry has the business expertise to turn the business around,or at least,so he thinks.What would your advice be to Harry in these circumstances?

Accepted Answer

Not to get involved in the man

Question 14

Explain what is meant by an agent's "apparent authority."

Accepted Answer

When a principal has led someone to beli

Question 15

Joe entered into partnership with two others in the establishment of a real estate sales agency.The other two,Sam and Harry,had considerable experience in the real estate business but no money.Joe,on the other hand,had his own home and several significant assets,and although he didn't have any experience in the real estate business,his monetary contribution made him an equal partner with Sam and Harry.Unfortunately,Harry misused some trust funds that had come into his care as a result of business,investing it in the business of one of his sons rather than an interest-bearing account.The business of the son went sour and the money was lost.The client sued Harry,Sam,and Joe.Explain the legal position of Joe here.

Accepted Answer

Because Joe was a partner with the other

Question 16

Which of the following is correct with respect to partnership?

Accepted Answer

A)  Partnership is a separate legal entity. 
B)  General partners have limited liability. 
C)  General partners have unlimited liability. 
D)  Partners are not agents for each other. 
E)  A partnership can be made up of only limited partners. 
A)  Partnership is a separate legal entity. 
B)  General partners have limited liability. 
C)  General partners have unlimited liability. 
D)  Partners are not agents for each other. 
E)  A partnership can be made up of only limited partners.

Question 17

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

Accepted Answer

The actual authority of an agent is dete

Question 18

Any restrictions in the employment contract between principal and agent on an agent's authority will be binding on a third party.

Accepted Answer

A) True 
 B)False

Question 19

To what does the term "estoppel" refer?

Accepted Answer

To an equitable remedy that st

Question 20

Which of the following statements is correct with respect to unlimited liability?

Accepted Answer

A)  This means the partner can lose what she has invested but no more. 
B)  Only the partner's share of the partnership assets can be used to satisfy the debt incurred by another partner. 
C)  The partner cannot only lose what she has invested but can also be required to pay an additional amount equal to what she has invested. 
D)  Each partner can be held responsible for the debts of the partnership no matter how great they are. 
E)  If there are two partners, each partner can be held responsible for an amount equal to but no more than one half of the debts of the partnership. 
A)  This means the partner can lose what she has invested but no more. 
B)  Only the partner's share of the partnership assets can be used to satisfy the debt incurred by another partner. 
C)  The partner cannot only lose what she has invested but can also be required to pay an additional amount equal to what she has invested. 
D)  Each partner can be held responsible for the debts of the partnership no matter how great they are. 
E)  If there are two partners, each partner can be held responsible for an amount equal to but no more than one half of the debts of the partnership.

Explain what must be done to create a limited partnership.

Limited liability can be the most significant disadvantage of the sole proprietorship.

When an agent acts beyond the specific authority given by the principal,that action will not be binding on the principal.

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome,if partnership is chosen as the method of carrying on business.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Usually,the name of the business must be registered if it is different from the sole proprietor's name,and a licence to operate must be obtained from the appropriate level of government.

Which of the following is incorrect with respect to the law of partnership?

In LeRuyet v.Stenner,Stenner defrauded LeRuyet,who gave him money to purchase a Great West annuity.LeRuyet claimed that Great West was vicariously liable.What did the Court determine?

Explain what is meant by an agent's "apparent authority."

Which of the following is correct with respect to partnership?

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

Any restrictions in the employment contract between principal and agent on an agent's authority will be binding on a third party.

To what does the term "estoppel" refer?

Which of the following statements is correct with respect to unlimited liability?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Corporations

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

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Exam 11: Agency and Partnership

Explain what must be done to create a limited partnership.

Limited liability can be the most significant disadvantage of the sole proprietorship.

When an agent acts beyond the specific authority given by the principal,that action will not be binding on the principal.

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome,if partnership is chosen as the method of carrying on business.

An agent cannot bind the principal in a contract with a third party unless there is an agency contract between the principal and the agent.

Usually,the name of the business must be registered if it is different from the sole proprietor's name,and a licence to operate must be obtained from the appropriate level of government.

Which of the following is incorrect with respect to the law of partnership?

In LeRuyet v.Stenner,Stenner defrauded LeRuyet,who gave him money to purchase a Great West annuity.LeRuyet claimed that Great West was vicariously liable.What did the Court determine?

Explain what is meant by an agent's "apparent authority."

Which of the following is correct with respect to partnership?

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

Any restrictions in the employment contract between principal and agent on an agent's authority will be binding on a third party.

To what does the term "estoppel" refer?

Which of the following statements is correct with respect to unlimited liability?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Corporations

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

Priority of Creditors

Filters