Question 1

In which one of the following situations will the transaction not be binding on the principal?

Accepted Answer

A)  An employee of a flower shop is sent to the flower market every week to make purchases. This week he is told to buy only roses, but he can't pass up a tremendous deal on daisies and purchases a large quantity of them for the store. 
B)  A real estate salesperson, after disclosing the fact to his client, purchases the house the client is selling for himself. 
C)  A truck driver who is not an agent (no actual, implied, or apparent authority) enters into a contract on behalf of his employer to sell the cargo of ripe tomatoes after the truck breaks down and he can't get hold of the boss. 
D)  A chauffeur, going against specific instructions, purchases a new car for his employer. The employer has done nothing to lead the seller to believe the chauffeur has such authority, but is persuaded by the chauffeur to go for a drive before returning the car. 
E)  A salesman at a men's clothing store has heard a rumor that the store will be 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 all of the stock, display cases, and fixtures. The salesman accepts on behalf of the employer. 
A)  An employee of a flower shop is sent to the flower market every week to make purchases. This week he is told to buy only roses, but he can't pass up a tremendous deal on daisies and purchases a large quantity of them for the store. 
B)  A real estate salesperson, after disclosing the fact to his client, purchases the house the client is selling for himself. 
C)  A truck driver who is not an agent (no actual, implied, or apparent authority) enters into a contract on behalf of his employer to sell the cargo of ripe tomatoes after the truck breaks down and he can't get hold of the boss. 
D)  A chauffeur, going against specific instructions, purchases a new car for his employer. The employer has done nothing to lead the seller to believe the chauffeur has such authority, but is persuaded by the chauffeur to go for a drive before returning the car. 
E)  A salesman at a men's clothing store has heard a rumor that the store will be 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 all of the stock, display cases, and fixtures. The salesman accepts on behalf of the employer.

Question 2

Which one of the following situations will result in a partnership existing? Assume no corporation has been created.

Accepted Answer

A)  A lawyer and a real estate agent split the commission. 
B)  Joe and Mary own a house together and share the income from it. 
C)  Employees are given bonuses because of increased profits. 
D)  Joe and Mary own a shoe store business together and share the profits. 
E)  Joe pays back a debt to Harry by giving Harry a percentage of the profits from his business. 
A)  A lawyer and a real estate agent split the commission. 
B)  Joe and Mary own a house together and share the income from it. 
C)  Employees are given bonuses because of increased profits. 
D)  Joe and Mary own a shoe store business together and share the profits. 
E)  Joe pays back a debt to Harry by giving Harry a percentage of the profits from his business.

Question 3

Max has been sued for $20,000 as a partner with Jim Nogoode. Which of the following is false with regard to determining whether or not a person is a partner?

Accepted Answer

A)  Co-ownership of a property does not in itself raise a presumption of partnership. 
B)  If no profit was made in the business, Max would not be a partner. 
C)  Sharing gross revenues of a business does not in itself raise a presumption of partnership. 
D)  Sharing of profits is evidence of the existence of a partnership. 
E)  The legal relationship of partnership requires that two or more persons carry on business in common with a view to profit 
A)  Co-ownership of a property does not in itself raise a presumption of partnership. 
B)  If no profit was made in the business, Max would not be a partner. 
C)  Sharing gross revenues of a business does not in itself raise a presumption of partnership. 
D)  Sharing of profits is evidence of the existence of a partnership. 
E)  The legal relationship of partnership requires that two or more persons carry on business in common with a view to profit

Question 4

Which of the following is a violation of the fiduciary duty of a partner?

Accepted Answer

A)  Where one partner uses information that he has gained from the partnership for the advantage of the partnership. 
B)  When one partner starts another business without the consent of the other partners which is the same as or in competition with the partnership business 
C)  Where a partner uses the partnership property for partnership business. 
D)  Where one partner carries on an business unrelated to the partnership with the permission of the partners 
E)  Where one partner learns of an investment opportunity in the field of the partnership and tells the partners. The partners decline on the opportunity, so he takes advantage of it himself 
A)  Where one partner uses information that he has gained from the partnership for the advantage of the partnership. 
B)  When one partner starts another business without the consent of the other partners which is the same as or in competition with the partnership business 
C)  Where a partner uses the partnership property for partnership business. 
D)  Where one partner carries on an business unrelated to the partnership with the permission of the partners 
E)  Where one partner learns of an investment opportunity in the field of the partnership and tells the partners. The partners decline on the opportunity, so he takes advantage of it himself

Question 5

Joe and Sam set up an import/export business in partnership, but they needed extra money. Harry was invited to invest as a limited partner. Unfortunately, the business began to lose money because of the poor business sense of Joe and Sam. Harry has the business expertise to turn the business around, or at least, so he thinks. What would your advice be to Harry in these circumstances?

Accepted Answer

Not to get involved in the man

Question 6

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Accepted Answer

A) True 
 B)False

Question 7

Discuss how an agent's authority may be terminated, as well as the effect of such termination.

Accepted Answer

An agent's authority ends as soon as the

Question 8

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

Accepted Answer

A) True 
 B)False

Question 9

"Partners in a limited liability partnership (LLP) are not liable for the liability of the partnership." Discuss the accuracy of this statement.

Accepted Answer

This statement is not accurate. Professi

Question 10

An agent need not disclose the fact that he is acting for a principal in dealings with a third party, and that contract may still be binding on that third party.

Accepted Answer

A) True 
 B)False

Question 11

It is only where a principal consciously ratifies that a contract can be effectively ratified.

Accepted Answer

A) True 
 B)False

Question 12

Distinguish between a partnership and a corporation.

Accepted Answer

A partnership involves two or more peopl

Question 13

Explain the liability of a partner for another partner's actions.

Accepted Answer

Each partner is vicariously liable in to

Question 14

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

Accepted Answer

A)  The book store assets will only be available to the bank if the book store is operated by Smith in conjunction with the hotel. 
B)  The bank can only go after the assets of the book store if Smith was the actual person who negotiated the loan with the bank. 
C)  Because of the concept of limited liability, he can lose only what he has invested in the hotel. 
D)  Although the bank can go after Smith's personal assets, they cannot go after the assets of the book store because the book store is a separate legal entity from Smith. 
E)  The bank can look to the assets of the book store to pay off the debt. 
A)  The book store assets will only be available to the bank if the book store is operated by Smith in conjunction with the hotel. 
B)  The bank can only go after the assets of the book store if Smith was the actual person who negotiated the loan with the bank. 
C)  Because of the concept of limited liability, he can lose only what he has invested in the hotel. 
D)  Although the bank can go after Smith's personal assets, they cannot go after the assets of the book store because the book store is a separate legal entity from Smith. 
E)  The bank can look to the assets of the book store to pay off the debt.

Question 15

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

Accepted Answer

A)  They made it clear in their partnership agreement that they would not be liable for each other's actions. 
B)  Joe is in a partnership with Sam and injures a customer while doing partnership business. 
C)  Joe, without the knowledge or consent of his partner Sam, purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D)  Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E)  Joe is in a partnership with Sam in a shoe store, and without telling Sam, Joe opens up a franchise of Kinney's Shoes in an adjoining municipality, which suffers a loss. 
A)  They made it clear in their partnership agreement that they would not be liable for each other's actions. 
B)  Joe is in a partnership with Sam and injures a customer while doing partnership business. 
C)  Joe, without the knowledge or consent of his partner Sam, purchases a gross of patent leather shoes in the name of the partnership shoe business. 
D)  Joe absconds with trust funds he has accepted from a client in his accounting partnership with Sam. 
E)  Joe is in a partnership with Sam in a shoe store, and without telling Sam, Joe opens up a franchise of Kinney's Shoes in an adjoining municipality, which suffers a loss.

Question 16

Which of the following is correct with respect to the law of partnership?

Accepted Answer

A)  Partnership is generally a less costly method of carrying on business than incorporation. 
B)  All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
C)  Any major change in the partnership must be made by unanimous agreement, and this cannot be changed by partnership agreement. 
D)  All partnerships must be registered. 
E)  The partnership relationship is governed by legislation that states that profits and losses are to be shared equally, and this cannot be modified by agreement. 
A)  Partnership is generally a less costly method of carrying on business than incorporation. 
B)  All partners have a right to an equal say in the management of the partnership and this cannot be changed by agreement. 
C)  Any major change in the partnership must be made by unanimous agreement, and this cannot be changed by partnership agreement. 
D)  All partnerships must be registered. 
E)  The partnership relationship is governed by legislation that states that profits and losses are to be shared equally, and this cannot be modified by agreement.

Question 17

Which of the following is correct with respect to the ratification of an agent's contracts?

Accepted Answer

A)  When a contract entered into by an agent is ratified by a principal, it commences at the time the principal ratifies the contract. 
B)  A principal can only ratify an agreement entered into by an agent if his name has not been used. 
C)  A contract can only be ratified if the principal was not able to enter into the contract himself at the time of ratification. 
D)  The agent can set a time limit within which the ratification must take place. 
E)  A principal can ratify a contract where the agent has gone beyond both his actual and apparent authority. 
A)  When a contract entered into by an agent is ratified by a principal, it commences at the time the principal ratifies the contract. 
B)  A principal can only ratify an agreement entered into by an agent if his name has not been used. 
C)  A contract can only be ratified if the principal was not able to enter into the contract himself at the time of ratification. 
D)  The agent can set a time limit within which the ratification must take place. 
E)  A principal can ratify a contract where the agent has gone beyond both his actual and apparent authority.

Question 18

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

Accepted Answer

The main advantages of partnership are i

Question 19

Alison told her partners in writing that she would be leaving the law partnership at the current partnership year-end, January 31, 2012. At year-end, Alison's partners bought her partnership interest and agreed that she would no longer be liable for any of the prior or subsequent partnership obligations. In February 2012, one of the remaining partners absconded with $2,000,000 held for Mr. Smith, a long-time client, taken in trust in September 2011. Mr. Smith sued the partnership, the partners, and Alison. Based on the foregoing facts, which of the following statements is false?

Accepted Answer

A)  Mr. Smith can recover on his judgment out of the partnership assets. 
B)  If Alison gave Mr. Smith actual notice of her leaving the partnership, and he agreed that she would no longer be obligated for the partnership's obligations, she will not be liable to Mr. Smith. 
C)  After the partnership assets are exhausted, Mr. Smith can recover on his judgment from any one of the remaining partners but not Alison. 
D)  All of the partners, including Alison, have the right to recover anything they have to pay from the absconding partner. 
E)  She has the right to recover any funds she has to pay from her former partners. 
A)  Mr. Smith can recover on his judgment out of the partnership assets. 
B)  If Alison gave Mr. Smith actual notice of her leaving the partnership, and he agreed that she would no longer be obligated for the partnership's obligations, she will not be liable to Mr. Smith. 
C)  After the partnership assets are exhausted, Mr. Smith can recover on his judgment from any one of the remaining partners but not Alison. 
D)  All of the partners, including Alison, have the right to recover anything they have to pay from the absconding partner. 
E)  She has the right to recover any funds she has to pay from her former partners.

Question 20

Which of the following is considered to be a separate legal person in law?

Accepted Answer

A)  A partnership 
B)  An agency 
C)  A corporation 
D)  A professional practice 
E)  A sole proprietorship 
A)  A partnership 
B)  An agency 
C)  A corporation 
D)  A professional practice 
E)  A sole proprietorship

In which one of the following situations will the transaction not be binding on the principal?

Which one of the following situations will result in a partnership existing? Assume no corporation has been created.

Max has been sued for $20,000 as a partner with Jim Nogoode. Which of the following is false with regard to determining whether or not a person is a partner?

Which of the following is a violation of the fiduciary duty of a partner?

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Discuss how an agent's authority may be terminated, as well as the effect of such termination.

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

"Partners in a limited liability partnership (LLP) are not liable for the liability of the partnership." Discuss the accuracy of this statement.

An agent need not disclose the fact that he is acting for a principal in dealings with a third party, and that contract may still be binding on that third party.

It is only where a principal consciously ratifies that a contract can be effectively ratified.

Distinguish between a partnership and a corporation.

Explain the liability of a partner for another partner's actions.

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

Which of the following is correct with respect to the law of partnership?

Which of the following is correct with respect to the ratification of an agent's contracts?

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

Which of the following is considered to be a separate legal person in law?

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

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Exam 11: Agency and Partnership

In which one of the following situations will the transaction not be binding on the principal?

Which one of the following situations will result in a partnership existing? Assume no corporation has been created.

Max has been sued for $20,000 as a partner with Jim Nogoode. Which of the following is false with regard to determining whether or not a person is a partner?

Which of the following is a violation of the fiduciary duty of a partner?

A sole proprietor is not only responsible for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Discuss how an agent's authority may be terminated, as well as the effect of such termination.

A partnership is primarily a contractual relationship and can be created verbally or implied from conduct.

"Partners in a limited liability partnership (LLP) are not liable for the liability of the partnership." Discuss the accuracy of this statement.

An agent need not disclose the fact that he is acting for a principal in dealings with a third party, and that contract may still be binding on that third party.

It is only where a principal consciously ratifies that a contract can be effectively ratified.

Distinguish between a partnership and a corporation.

Explain the liability of a partner for another partner's actions.

Joe Smith owns a book store as the sole proprietor. He is also a partner in a hotel, which borrowed $100,000 from the bank. Which of the following statements is true?

In which one of the following situations would Sam not be liable for the conduct of his partner, Joe?

Which of the following is correct with respect to the law of partnership?

Which of the following is correct with respect to the ratification of an agent's contracts?

Discuss the advantages and disadvantages of partnership as a method of carrying on business compared to incorporation.

Which of the following is considered to be a separate legal person in law?

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