Question 1

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf
will be void.

Accepted Answer

A) True 
 B)False

Question 2

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Accepted Answer

Here students must show that they unders

Question 3

Which one of the following is incorrect with respect to the rights of partners unless they have agreed otherwise?

Accepted Answer

A)  No major decision can be taken without unanimous agreement of all the partners. 
B)  Reasonable expenses incurred by the partners in the course of business are reimbursed. 
C)  Partners can sell their share of the partnership to another person without the agreement of the partners. 
D)  All partners have the right to share in management. 
E)  All profits are shared equally between the partners. 
A)  No major decision can be taken without unanimous agreement of all the partners. 
B)  Reasonable expenses incurred by the partners in the course of business are reimbursed. 
C)  Partners can sell their share of the partnership to another person without the agreement of the partners. 
D)  All partners have the right to share in management. 
E)  All profits are shared equally between the partners.

Question 4

It is possible through a partnership agreement to create different classes of partners.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

The actual authority of an agent is dete

Question 6

Which of the following is true with respect to the agency relationship?

Accepted Answer

A)  Actual authority is the authority the principal has implied in conversations with a third party. 
B)  An agent acting gratuitously can never bind the principal. 
C)  When a principal has specifically limited the authority of the agent, that agent can never bind the principal in a contract, even if the agent acts outside his authority. 
D)  An agent's authority is limited to whatever authority the principal specifically gives the agent. 
E)  An agent's apparent authority may be implied from the position that the agent holds in the employer's organization. 
A)  Actual authority is the authority the principal has implied in conversations with a third party. 
B)  An agent acting gratuitously can never bind the principal. 
C)  When a principal has specifically limited the authority of the agent, that agent can never bind the principal in a contract, even if the agent acts outside his authority. 
D)  An agent's authority is limited to whatever authority the principal specifically gives the agent. 
E)  An agent's apparent authority may be implied from the position that the agent holds in the employer's organization.

Question 7

Chan sold a business to Scott and in the process they valued the "good will" at $50,000. In the sale contract, it was agreed that this amount would be paid by Scott giving Chan 15% of the business profits until it was paid. This creates a partnership between them.

Accepted Answer

A) True 
 B)False

Question 8

A contract entered into by an agent cannot be ratified inadvertently by the principal.

Accepted Answer

A) True 
 B)False

Question 9

The Partnership Act allows the partners to change their liabilities and obligations to third parties.

Accepted Answer

A) True 
 B)False

Question 10

Explain under what circumstances a principal can be held liable for torts committed by an agent.

Accepted Answer

Where there is an employment r

Question 11

"For a partnership to exist, the parties must have consented to its creation." Comment on the accuracy of that statement.

Accepted Answer

It's inaccurate. A partnership

Question 12

An agent owes a fiduciary duty to act in the best interests of the principal and the third party.

Accepted Answer

A) True 
 B)False

Question 13

Explain under what circumstances a principal who is not an employer will be held responsible for the wrongful acts of his agent.

Accepted Answer

Where the agent has

Question 14

Which one of the following statements is correct with respect to sole proprietorships?

Accepted Answer

A)  The sole proprietor is restricted to service type businesses. 
B)  A sole proprietorship involves limited liability. 
C)  A sole proprietorship is a separate legal entity with one shareholder. 
D)  The sole proprietor is a society under the Societies Act. 
E)  A sole proprietorship involves unlimited liability for the proprietor. 
A)  The sole proprietor is restricted to service type businesses. 
B)  A sole proprietorship involves limited liability. 
C)  A sole proprietorship is a separate legal entity with one shareholder. 
D)  The sole proprietor is a society under the Societies Act. 
E)  A sole proprietorship involves unlimited liability for the proprietor.

Question 15

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 16

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Accepted Answer

A)  For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
B)  A partnership can be created by an intention to share the revenues between the partners. 
C)  For a person to be a limited partner, there must be at least two general partners. 
D)  A partnership can be created only by contract. 
E)  Where two people agree to enter into a partnership, there is no partnership created unless all of the elements of a contract are present. 
A)  For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
B)  A partnership can be created by an intention to share the revenues between the partners. 
C)  For a person to be a limited partner, there must be at least two general partners. 
D)  A partnership can be created only by contract. 
E)  Where two people agree to enter into a partnership, there is no partnership created unless all of the elements of a contract are present.

Question 17

Distinguish between an agent and an employee.

Accepted Answer

An employee performs work under the cont

Question 18

Joe sold Harry his barber shop for $100,000. He was paid $20,000 in cash, the other $80,000 to be paid by Harry giving Joe 20% of the profits of the business until the amount was paid off. Unfortunately, a customer, Sam, was injured by Harry, who managed to cut off his right ear while shaving. Sam sued both Harry and Joe. Explain his likelihood of success.

Accepted Answer

There is no partnership here between Joe

Question 19

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

Accepted Answer

A)  When a partner enters into a partnership arrangement, he can only lose what he has invested in that partnership. 
B)  A general partner is responsible, independent of what he has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
C)  If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
D)  A partner can protect himself from any liability beyond his investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability. 
E)  If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner. 
A)  When a partner enters into a partnership arrangement, he can only lose what he has invested in that partnership. 
B)  A general partner is responsible, independent of what he has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
C)  If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
D)  A partner can protect himself from any liability beyond his investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability. 
E)  If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner.

Question 20

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 determined that Stenner had apparent authority to act for Great West, despite the fact that Great West had made no representations to that effect. 
B)  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. 
C)  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. 
D)  The Court confirmed that the principle of apparent authority no longer exists; only actual authority will suffice. 
E)  The Court held Great West vicariously liable because the defrauded victim had no way to recover the money from Stenner directly. 
A)  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. 
B)  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. 
C)  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. 
D)  The Court confirmed that the principle of apparent authority no longer exists; only actual authority will suffice. 
E)  The Court held Great West vicariously liable because the defrauded victim had no way to recover the money from Stenner directly.

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Which one of the following is incorrect with respect to the rights of partners unless they have agreed otherwise?

It is possible through a partnership agreement to create different classes of partners.

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

Which of the following is true with respect to the agency relationship?

Chan sold a business to Scott and in the process they valued the "good will" at $50,000. In the sale contract, it was agreed that this amount would be paid by Scott giving Chan 15% of the business profits until it was paid. This creates a partnership between them.

A contract entered into by an agent cannot be ratified inadvertently by the principal.

The Partnership Act allows the partners to change their liabilities and obligations to third parties.

Explain under what circumstances a principal can be held liable for torts committed by an agent.

"For a partnership to exist, the parties must have consented to its creation." Comment on the accuracy of that statement.

An agent owes a fiduciary duty to act in the best interests of the principal and the third party.

Explain under what circumstances a principal who is not an employer will be held responsible for the wrongful acts of his agent.

Which one of the following statements is correct with respect to sole proprietorships?

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.

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Distinguish between an agent and an employee.

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

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?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes the Courts and Alternatives to Litigation

Intentional Torts

Negligence, Professional Liability, and Insurance Law

Formation of Contracts

Formation of Contracts Continued

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

Exam 11: Agency and Partnership

If an agency agreement lacks consideration, any agreement the agent enters into on the principal's behalf will be void.

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Which one of the following is incorrect with respect to the rights of partners unless they have agreed otherwise?

It is possible through a partnership agreement to create different classes of partners.

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

Which of the following is true with respect to the agency relationship?

Chan sold a business to Scott and in the process they valued the "good will" at $50,000. In the sale contract, it was agreed that this amount would be paid by Scott giving Chan 15% of the business profits until it was paid. This creates a partnership between them.

A contract entered into by an agent cannot be ratified inadvertently by the principal.

The Partnership Act allows the partners to change their liabilities and obligations to third parties.

Explain under what circumstances a principal can be held liable for torts committed by an agent.

"For a partnership to exist, the parties must have consented to its creation." Comment on the accuracy of that statement.

An agent owes a fiduciary duty to act in the best interests of the principal and the third party.

Explain under what circumstances a principal who is not an employer will be held responsible for the wrongful acts of his agent.

Which one of the following statements is correct with respect to sole proprietorships?

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.

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Distinguish between an agent and an employee.

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

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?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes the Courts and Alternatives to Litigation

Intentional Torts

Negligence, Professional Liability, and Insurance Law

Formation of Contracts

Formation of Contracts Continued

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