Question 1

Explain under what circumstances a partnership can come to an end.

Accepted Answer

Usually by notice, but it may

Question 2

When an agent's authority is terminated by mutual agreement, what is the impact on the agent's actual and apparent authority?

Accepted Answer

A)  Both the actual authority and the apparent authority immediately cease. 
B)  The actual authority ceases, but the apparent authority continues until the third party is notified of
Termination. 
C)  The actual authority continues until the third party is notified of termination, but the apparent authority ceases. 
D)  Both the actual authority and the apparent authority continue, because an agent's authority cannot be terminated by mutual agreement. 
E)  Both the actual authority and the apparent authority continue until the third party is notified of
Termination. 
A)  Both the actual authority and the apparent authority immediately cease. 
B)  The actual authority ceases, but the apparent authority continues until the third party is notified of
Termination. 
C)  The actual authority continues until the third party is notified of termination, but the apparent authority ceases. 
D)  Both the actual authority and the apparent authority continue, because an agent's authority cannot be terminated by mutual agreement. 
E)  Both the actual authority and the apparent authority continue until the third party is notified of
Termination.

Question 3

A third party is bound to the principal only when he knows that agent is acting for that principal.

Accepted Answer

A) True 
 B)False

Question 4

Societies are separate legal entities, separate and apart from the members who make them up.

Accepted Answer

A) True 
 B)False

Question 5

Information that comes to the agent because of his position as agent must be passed on to the principal.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Sam hires Joe to negotiate and sign a contract with Ken on Sam's behalf. Which of the following is true?

Accepted Answer

A)  If Joe acts outside his express authority and negotiates and signs the contract with Ken, Sam may not be a party to that contract. 
B)  If Joe acts outside his implied and express authority, Sam will owe him for his services. 
C)  If Joe acts outside his express, implied, and apparent authority, he could be sued by Sam, but not by Ken, because he has no contractual relationship with Ken. 
D)  If Joe acts outside express, implied, and apparent authority, Sam is not bound by the contract, even if he ratifies the contract. 
E)  If Joe acts within his apparent authority, but outside his express or implied authority, Sam will be bound by the contract, but may sue Joe for breach of his agency contract. 
A)  If Joe acts outside his express authority and negotiates and signs the contract with Ken, Sam may not be a party to that contract. 
B)  If Joe acts outside his implied and express authority, Sam will owe him for his services. 
C)  If Joe acts outside his express, implied, and apparent authority, he could be sued by Sam, but not by Ken, because he has no contractual relationship with Ken. 
D)  If Joe acts outside express, implied, and apparent authority, Sam is not bound by the contract, even if he ratifies the contract. 
E)  If Joe acts within his apparent authority, but outside his express or implied authority, Sam will be bound by the contract, but may sue Joe for breach of his agency contract.

Question 8

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

Accepted Answer

A)  the reasonable agent theory. 
B)  the agent's apparent authority. 
C)  fiduciary duty 
D)  agency by express agreement. 
E)  the failure of the principal to register the agency agreement. 
A)  the reasonable agent theory. 
B)  the agent's apparent authority. 
C)  fiduciary duty 
D)  agency by express agreement. 
E)  the failure of the principal to register the agency agreement.

Question 9

Q.N.S. Paper Co. v. Chartwell Shipping Ltd. involved an undisclosed principal situation. The Supreme Court had to determine whether the agent could be successfully sued. What did the Court find?

Accepted Answer

A)  An agent is always liable if a principal defaults in its obligations under a contract. 
B)  The agent could be successfully sued on the basis that the principal was not disclosed. This is always material information that the agent is duty-bound to share with the other side. 
C)  Because Chartwell was acting as an agent in a commercial context, there was personal liability for that agent on the contract. 
D)  Because Chartwell had made it clear it was an agent, there was no personal liability for that agent on the contract. 
E)  An agent can never be successfully sued, as long as it can proven that the agent was, in fact, representing another. 
A)  An agent is always liable if a principal defaults in its obligations under a contract. 
B)  The agent could be successfully sued on the basis that the principal was not disclosed. This is always material information that the agent is duty-bound to share with the other side. 
C)  Because Chartwell was acting as an agent in a commercial context, there was personal liability for that agent on the contract. 
D)  Because Chartwell had made it clear it was an agent, there was no personal liability for that agent on the contract. 
E)  An agent can never be successfully sued, as long as it can proven that the agent was, in fact, representing another.

Question 10

Three students in a business faculty created a computer program that compared various retirement plans. They decided to go into business together to offer their services directly to the public. After doing a feasibility study, they felt there were profits to be made. For tax reasons, they decided not to incorporate. Each contributed $15,000 and Wayne, one of the three, contributed a computer. In a short written agreement, they agreed that all three would be actively involved in the management of the business, that all three would work to update the program, that they would share the profits equally, and that they should not be viewed as partners. Based on these facts, which of the following statements is true?

Accepted Answer

A)  They would be considered partners despite their express intention to the contrary in their agreement. 
B)  If one partner dies, the partnership would be dissolved even if they state otherwise in their agreement. 
C)  They are not partners unless they realize a profit from their enterprise. 
D)  They are not partners because they do not share profits in proportion to their capital contributions. 
E)  If Wayne were to go bankrupt, the partnership would be dissolved even if they state otherwise in their agreement. 
A)  They would be considered partners despite their express intention to the contrary in their agreement. 
B)  If one partner dies, the partnership would be dissolved even if they state otherwise in their agreement. 
C)  They are not partners unless they realize a profit from their enterprise. 
D)  They are not partners because they do not share profits in proportion to their capital contributions. 
E)  If Wayne were to go bankrupt, the partnership would be dissolved even if they state otherwise in their agreement.

Question 11

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

Accepted Answer

A) True 
 B)False

Question 12

The Court in Steinman v. Snarey found that Mr. Snarey devised and conducted a fraudulent scheme as an
Agent of Mutual Life. What was the result?

Accepted Answer

A)  Only the agent was liable, because the action taken was dishonest, and therefore outside the scope of the agency relationship. 
B)  The doctrine of caveat emptor was applied. 
C)  As an agent with authority to enter into this general type of transaction, the company was vicariously liable for his conduct. 
D)  The company could only be liable if it were shown Mr. Snarey were an employee acting under the direction of a superior. 
E)  Neither the agent nor the company could be liable, because Mr. Snarey was only an agent, and the company had no actual knowledge. 
A)  Only the agent was liable, because the action taken was dishonest, and therefore outside the scope of the agency relationship. 
B)  The doctrine of caveat emptor was applied. 
C)  As an agent with authority to enter into this general type of transaction, the company was vicariously liable for his conduct. 
D)  The company could only be liable if it were shown Mr. Snarey were an employee acting under the direction of a superior. 
E)  Neither the agent nor the company could be liable, because Mr. Snarey was only an agent, and the company had no actual knowledge.

Question 13

Apparent authority is determined by the representation of the agent.

Accepted Answer

A) True 
 B)False

Explain under what circumstances a partnership can come to an end.

When an agent's authority is terminated by mutual agreement, what is the impact on the agent's actual and apparent authority?

A third party is bound to the principal only when he knows that agent is acting for that principal.

Societies are separate legal entities, separate and apart from the members who make them up.

Information that comes to the agent because of his position as agent must be passed on to the principal.

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.

Sam hires Joe to negotiate and sign a contract with Ken on Sam's behalf. Which of the following is true?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

Q.N.S. Paper Co. v. Chartwell Shipping Ltd. involved an undisclosed principal situation. The Supreme Court had to determine whether the agent could be successfully sued. What did the Court find?

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

The Court in Steinman v. Snarey found that Mr. Snarey devised and conducted a fraudulent scheme as an Agent of Mutual Life. What was the result?

Apparent authority is determined by the representation of the agent.

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

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Exam 11: Agency and Partnership

Explain under what circumstances a partnership can come to an end.

When an agent's authority is terminated by mutual agreement, what is the impact on the agent's actual and apparent authority?

A third party is bound to the principal only when he knows that agent is acting for that principal.

Societies are separate legal entities, separate and apart from the members who make them up.

Information that comes to the agent because of his position as agent must be passed on to the principal.

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.

Sam hires Joe to negotiate and sign a contract with Ken on Sam's behalf. Which of the following is true?

In certain cases, a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his principal and even though his principal elected not to ratify the contract made by the agent. The third party can enforce the contract because of

Q.N.S. Paper Co. v. Chartwell Shipping Ltd. involved an undisclosed principal situation. The Supreme Court had to determine whether the agent could be successfully sued. What did the Court find?

Where there is no contract of agency between the principal and the agent, the actions of that agent cannot bind the principal.

The Court in Steinman v. Snarey found that Mr. Snarey devised and conducted a fraudulent scheme as an Agent of Mutual Life. What was the result?

Apparent authority is determined by the representation of the agent.

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