Question 1

Which of the following would result in the termination of agency by act of the parties?

Accepted Answer

A) The principal suffers a permanent loss of capacity. 
B) A specified result has been accomplished. 
C) The agent declares personal bankruptcy. 
D) The agent loses capacity or dies. 
A) The principal suffers a permanent loss of capacity. 
B) A specified result has been accomplished. 
C) The agent declares personal bankruptcy. 
D) The agent loses capacity or dies.

Question 2

An agency coupled with an interest is terminated if:

Accepted Answer

A) the principal revokes agency. 
B) the principal tenders his obligation. 
C) the principal loses capacity. 
D) the agent dies. 
A) the principal revokes agency. 
B) the principal tenders his obligation. 
C) the principal loses capacity. 
D) the agent dies.

Question 3

Which of the following is a principal generally required to pay for?

Accepted Answer

A) Undertakings that she did not request 
B) Services to which she did not consent 
C) A gratuitous agent 
D) Services performed by an agent which are generally compensated but for which the amount of compensation is not expressly stated 
A) Undertakings that she did not request 
B) Services to which she did not consent 
C) A gratuitous agent 
D) Services performed by an agent which are generally compensated but for which the amount of compensation is not expressly stated

Question 4

An agent who accepts a bribe to purchase goods for a principal from a seller who is a personal friend breaches his ________ duty by taking the money,since it is the agent's duty to work only for the best interests of the principal.

Accepted Answer

A) fiduciary 
B) statutory 
C) indemnity 
D) gratuitous 
A) fiduciary 
B) statutory 
C) indemnity 
D) gratuitous

Question 5

Which of the following agreements will result in the formation of an agency coupled with an interest?

Accepted Answer

A) Borrower shall pledge securities to a lender,authorizing the lender to sell the securities and apply the proceeds to the loan in the event of default. 
B) Employee is hired for a period of two years at $40,000 per annum plus 2% of net sales. 
C) Broker is to receive a 5% sales commission out of the proceeds of the sale of a parcel of land. 
D) Attorney is to receive 25% of the plaintiff's recovery for personal injuries. 
A) Borrower shall pledge securities to a lender,authorizing the lender to sell the securities and apply the proceeds to the loan in the event of default. 
B) Employee is hired for a period of two years at $40,000 per annum plus 2% of net sales. 
C) Broker is to receive a 5% sales commission out of the proceeds of the sale of a parcel of land. 
D) Attorney is to receive 25% of the plaintiff's recovery for personal injuries.

Question 6

In the United States agency law is primarily governed by what type of law?

Accepted Answer

A) Federal law 
B) State law 
C) International law 
D) Religious law 
A) Federal law 
B) State law 
C) International law 
D) Religious law

Question 7

In agency law,the term "independent contractor" is referred to as what?

Accepted Answer

A) Nonemployee agent 
B) Employee 
C) Incorporator 
D) Organizer 
A) Nonemployee agent 
B) Employee 
C) Incorporator 
D) Organizer

Question 8

Ahmed hired Shlomo to act as his sales agent in his jewelry store.Ahmed authorized Shlomo actual express authority to sell items of jewelry up to $1,000 without checking with him;however,if the price was over $1,000,Shlomo was to check with Ahmed before making a sale.One day,a customer wanted to buy a necklace for $1,500 and Shlomo sold it to her without first checking with Ahmed.When Ahmed learned of this,he was upset because the price was a mistake;it should have been marked at $3,000.Ahmed wants the customer to return the necklace.Is the customer required to return the necklace in this case?

Accepted Answer

A) Yes,because Shlomo did not have express authority to sell that item. 
B) Yes,because Shlomo did not have implied authority to sell that item. 
C) No,because Shlomo did have apparent authority to sell that item. 
D) No,because Shlomo did have implied authority to sell that item. 
A) Yes,because Shlomo did not have express authority to sell that item. 
B) Yes,because Shlomo did not have implied authority to sell that item. 
C) No,because Shlomo did have apparent authority to sell that item. 
D) No,because Shlomo did have implied authority to sell that item.

Question 9

Andrea hired Jack to be the sales agent for her paintings.However,in a month's time,she terminated the agency with Jack.Harold,a customer who had dealt with Jack earlier,was not aware of the termination.Harold approached Jack to buy a painting and wrote him a check of $5,000,the advance payment for the painting which Jack promised would be delivered in two weeks.When Jack did not contact Harold later,Harold demanded that Andrea honor the contract,since Jack sold the picture as her agent.Which of the following is true of this situation?

Accepted Answer

A) Since Jack had apparent authority,Andrea is liable to honor his contract with Harold. 
B) Harold's duty was to contact Andrea.His failure to do this removes her liability to honor the contract. 
C) Jack had express authority as Andrea's agent,which is not terminated with the termination of their agency. 
D) As Andrea terminated the agency with Jack in violation of his rights,Jack has the direct authority to sell her paintings. 
A) Since Jack had apparent authority,Andrea is liable to honor his contract with Harold. 
B) Harold's duty was to contact Andrea.His failure to do this removes her liability to honor the contract. 
C) Jack had express authority as Andrea's agent,which is not terminated with the termination of their agency. 
D) As Andrea terminated the agency with Jack in violation of his rights,Jack has the direct authority to sell her paintings.

Question 10

The law of Agency generally calls for the principal to indemnify the agent against financial loss while carrying out his/her duties.

Accepted Answer

A) True 
 B)False

Exam 35: The Agency Relationship

Which of the following would result in the termination of agency by act of the parties?

An agency coupled with an interest is terminated if:

Which of the following is a principal generally required to pay for?

An agent who accepts a bribe to purchase goods for a principal from a seller who is a personal friend breaches his ________ duty by taking the money,since it is the agent's duty to work only for the best interests of the principal.

Which of the following agreements will result in the formation of an agency coupled with an interest?

In the United States agency law is primarily governed by what type of law?

In agency law,the term "independent contractor" is referred to as what?

The law of Agency generally calls for the principal to indemnify the agent against financial loss while carrying out his/her duties.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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