Question 1

A minor cannot be appointed as an agent.

Accepted Answer

A) True 
 B)False

Question 2

Fact Pattern 31-1B 
Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not au?thorized to modify the prices or other terms of a sale at the shop.
-Refer to Fact Pattern 31-1B. Nia authorizes Liz to sell clothes at remote lo?cations at prices that Liz negotiates in those locations. With respect to sales at those locations, Liz is

Accepted Answer

A)  an independent contractor. 
B)  Nia's employee only. 
C)  Nia's employee and agent. 
D)  Nia's principal. 
A)  an independent contractor. 
B)  Nia's employee only. 
C)  Nia's employee and agent. 
D)  Nia's principal.

Question 3

Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela to so act. They set out the terms in a written document, which they both sign. This is

Accepted Answer

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

Question 4

Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore 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 5

Macro Corporation and National Purchasing Company may create an agency agreement

Accepted Answer

A)  by conduct, in writing, or orally. 
B)  by conduct or orally only. 
C)  in writing only. 
D)  under no circumstances. 
A)  by conduct, in writing, or orally. 
B)  by conduct or orally only. 
C)  in writing only. 
D)  under no circumstances.

Question 6

Fact Pattern 31-1B 
Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not au?thorized to modify the prices or other terms of a sale at the shop.
-Refer to Fact Pattern 31-1B. Nia hires O'Reilly's Carpet Company to clean the carpets of her shop. Nia gives O'Reilly's instructions as to what needs to be cleaned and when. O'Reilly's is

Accepted Answer

A)  an independent contractor. 
B)  Nia's employee only. 
C)  Nia's employee and agent. 
D)  Nia's principal. 
A)  an independent contractor. 
B)  Nia's employee only. 
C)  Nia's employee and agent. 
D)  Nia's principal.

Question 7

A minor can be an agent.

Accepted Answer

A) True 
 B)False

Question 8

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Accepted Answer

A) True 
 B)False

Question 9

Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of

Accepted Answer

A)  a person having those skills. 
B)  an average, unskilled person. 
C)  a reasonable person. 
D)  the principal. 
A)  a person having those skills. 
B)  an average, unskilled person. 
C)  a reasonable person. 
D)  the principal.

Question 10

A fiduciary relationship allows the parties to avoid obligations without liability.

Accepted Answer

A) True 
 B)False

Question 11

An agent is authorized to act on behalf of a principal in doing business with third parties.

Accepted Answer

A) True 
 B)False

Question 12

KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's

Accepted Answer

A)  employee. 
B)  independent contractor. 
C)  principal. 
D)  work for hire. 
A)  employee. 
B)  independent contractor. 
C)  principal. 
D)  work for hire.

Question 13

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

Accepted Answer

A)  no duty. 
B)  the duty of loyalty. 
C)  the duty of notification. 
D)  the duty of obedience. 
A)  no duty. 
B)  the duty of loyalty. 
C)  the duty of notification. 
D)  the duty of obedience.

Question 14

A principal owes an agent a duty of accounting.

Accepted Answer

A) True 
 B)False

Question 15

Dan, an agent for Eve, signs an agreement with Fred on Eve's behalf but ne?glects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is

Accepted Answer

A)  liable, because Dan's knowledge is imputed to Eve. 
B)  liable, because Fred's knowledge is imputed to Eve. 
C)  not liable, because Dan did not tell Eve about the tax. 
D)  not liable, because Fred did not tell Eve about the tax. 
A)  liable, because Dan's knowledge is imputed to Eve. 
B)  liable, because Fred's knowledge is imputed to Eve. 
C)  not liable, because Dan did not tell Eve about the tax. 
D)  not liable, because Fred did not tell Eve about the tax.

Question 16

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under

Accepted Answer

A)  the doctrine of estoppel. 
B)  the equal dignity rule. 
C)  the fiduciary principle. 
D)  the good faith statute. 
A)  the doctrine of estoppel. 
B)  the equal dignity rule. 
C)  the fiduciary principle. 
D)  the good faith statute.

Question 17

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Accepted Answer

A)  achieve nothing because the agreement says nothing on the issue. 
B)  attain the level that Rita achieved with her previous employer. 
C)  maintain the level Superior attained before Rita became an agent. 
D)  use reasonable diligence and skill in selling. 
A)  achieve nothing because the agreement says nothing on the issue. 
B)  attain the level that Rita achieved with her previous employer. 
C)  maintain the level Superior attained before Rita became an agent. 
D)  use reasonable diligence and skill in selling.

Question 18

Ella agrees to act as Fab's agent in settlement negotiations with Global In?surance Company. Ella works out a profitable compromise for Fab, but deposits the company's payment in her own account and refuses to give it to Fab. Fab files a suit against Ella. What remedies might the court impose?

Accepted Answer

Possible remedies include the normal con

Question 19

Irma retains Jerry as her authorized agent, unaware that Jerry is a mi?nor. Jerry enters into a contract with Ken on Irma's be?half. The contract is

Accepted Answer

A)  binding on Irma. 
B)  binding on Jerry and Ken, but not Irma. 
C)  binding on Ken, but not Irma or Jerry. 
D)  void. 
A)  binding on Irma. 
B)  binding on Jerry and Ken, but not Irma. 
C)  binding on Ken, but not Irma or Jerry. 
D)  void.

Question 20

Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached

Accepted Answer

A)  no duty. 
B)  the duty of accounting. 
C)  the duty of loyalty. 
D)  the duty of notification. 
A)  no duty. 
B)  the duty of accounting. 
C)  the duty of loyalty. 
D)  the duty of notification.

Exam 31: Agency Formation and Duties

A minor cannot be appointed as an agent.

Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela to so act. They set out the terms in a written document, which they both sign. This is

Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore is

Macro Corporation and National Purchasing Company may create an agency agreement

A minor can be an agent.

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of

A fiduciary relationship allows the parties to avoid obligations without liability.

An agent is authorized to act on behalf of a principal in doing business with third parties.

KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

A principal owes an agent a duty of accounting.

Dan, an agent for Eve, signs an agreement with Fred on Eve's behalf but ne?glects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Ella agrees to act as Fab's agent in settlement negotiations with Global In?surance Company. Ella works out a profitable compromise for Fab, but deposits the company's payment in her own account and refuses to give it to Fab. Fab files a suit against Ella. What remedies might the court impose?

Irma retains Jerry as her authorized agent, unaware that Jerry is a mi?nor. Jerry enters into a contract with Ken on Irma's be?half. The contract is

Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Law for Small Businesses

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations

Legal and Ethical Issues in Environmental Protection and Consumer Rights

Legal Issues in Property and Land Use