Exam 11: Agency and Partnership

Where Joe was given authority to do "anything necessarily incidental" to carrying out his agency function of selling vacuum cleaners for the principal, that gave Joe the authority to borrow money to purchase a car to be used in the business.

Gordon was hired to add CD-ROM capacity to Hank Lo's computer. Gordon was instructed to buy (1) a sound card, (2) speakers, and (3) a CD-ROM drive at ROMready, a firm with which Hank had credit. Hank visited the company and said Gordon had authority to act as his agent for the purpose of buying "computer components." While working on the computer, Gordon decided that Hank needed a new and better-designed mouse and a better printer. Gordon went to ROMready and purchased the mouse as an agent of Hank. Not satisfied with printers available at ROMready, he went to Printerhaven Ltd. and bought a printer "as agent for Hank Lo." On these facts, which of the following is true?

For a partnership to exist, something more than a single joint activity is required.

In the process of assembling land for Ace Construction Ltd. to build a supermarket, Joe entered into a contract with the seller Sam. In which of the following situations would Sam be able to sue the principal Ace?

What are the advantages and disadvantages of being a sole proprietor?

Chris was a systems analyst hired to determine the best system for a retail china shop. After a careful analysis of the shop's needs and the available software, Chris presented a written report, which was approved by the owner of the business. Chris was paid his fee and was asked by the owner if he would act as his agent in purchasing the hardware and software recommended in the report. The purchase was not to exceed $40,000 and the commission was to be $1,000. Chris agreed. Read each of the following separately and indicate which is true.

With regard to liability of partners, which of the following is true?

Which of the following statements is true with regard to an agent's duties?

A salesman 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 salesman accepts on behalf of the employer. Discuss the legal position of the parties.

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.

If an agent breaches his duty to his principal, his principal can sue the agent successfully for

Unlimited liability means that an investor can lose everything he has invested in a corporation.

The Partnership Act provides that if the partners do not agree otherwise, certain terms of a partnership agreement will be implied. Which of the following is not such an implied term?

Which of the following is incorrect with respect to the law governing limited partnerships?

A partnership is less expensive to set up than a corporation.

An agency relationship can be created by:

The sole proprietor carries on business alone and cannot employ others in the process.

Which of the following statements best describes a partnership?

Partners are vicariously liable for the wrongful acts of employees committed on partnership business.

In which one of the following situations will a court find that a partnership exists?