Question 1

If an e-agent fails to provide an on-screen confirmation of a purchase, the other party to the transaction can void the effect of any errors by avoiding the deal.

Accepted Answer

A) True 
 B)False  True

Question 2

Anything that an agent obtains by virtue of an agency relationship is held in a constructive trust and thereby belongs to

Accepted Answer

A)  the principal.
B)  the agent.
C)  the party from whom the agent obtained it.
D)  the equitable trust. A

Question 3

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn. Jess orally agrees to do so. This is an agency by

Accepted Answer

A)  agreement.
B)  estoppel.
C)  operation of law.
D)  ratification. A

Question 4

When the relationship between a principal and an independent contractor is not an employment relationship, it is an agency relationship.

Accepted Answer

A) True 
 B)False

Question 5

For the same reasons that workers may benefit from having employee status, employers may benefit from identifying workers as independent contractors.

Accepted Answer

A) True 
 B)False

Question 6

Clark hires Dell, a real estate broker, to sell his beach house. The house is destroyed in a storm before it can be sold. Dell is Clark's agent

Accepted Answer

A)  until Clark's insurer pays Dell's commission.
B)  until the destroyed house is sold.
C)  until the destroyed house is rebuilt and sold.
D)  no more.

Question 7

A gratuitous agent can be liable to a principal for breach of contract, even in the absence of a contract, but not liable for the negligent performance of the deal.

Accepted Answer

A) True 
 B)False

Question 8

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to the hosts of banquets and other events. In this capacity, Rosario is

Accepted Answer

A)  an agent.
B)  an employee.
C)  an independent contractor.
D)  a principal.

Question 9

In some situations, the courts find an agency relationship where there is no formal agreement.

Accepted Answer

A) True 
 B)False

Question 10

When a contract involves unusually hazardous activities, a principal can be shielded from liability by using as independent contractor as an agent.

Accepted Answer

A) True 
 B)False

Question 11

The doctrine of respondeat superior is applied differently to a multi-national corporation than it is to a small-town store with one clerk.

Accepted Answer

A) True 
 B)False

Question 12

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm. Jon makes a deal with Lila for the sheep, but neither Jon nor Kino pays the price. Lila sues Jon for breach. Jon's right to hold Kino liable for any damages is the right to

Accepted Answer

A)  none of the choices.
B)  compensation.
C)  indemnification.
D)  reimbursement.

Question 13

In an emergency situation, an agent has the authority to act appropriately under the circumstances.

Accepted Answer

A) True 
 B)False

Question 14

Rosa introduces Sol to her friend Trey as "my associate." Sol purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sol's actions, it will be because their relationship is

Accepted Answer

A)  an agency by agreement.
B)  an agency by estoppel.
C)  an agency by operation of law.
D)  not an agency relationship.

Question 15

Actual authority in an agency relationship arises from what a principal makes clear to a third party .

Accepted Answer

A) True 
 B)False

Question 16

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

Accepted Answer

A) True 
 B)False

Question 17

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts.

Accepted Answer

A) True 
 B)False

Question 18

Ana, a sales agent for Bread Company makes claims for a product that the company has told its agents not to make. Croissant Café sues the firm when the product fails to stand up to the claim. The company can sue Ana for

Accepted Answer

A)  breach of a constructive trust.
B)  failure of specific performance.
C)  indemnification.
D)  reimbursement.

Question 19

Agency relationships cannot exist outside employment, so agency law has a narrower reach than employment law.

Accepted Answer

A) True 
 B)False

Question 20

Flight Craft Corporation sends its agent Gavin to a sales convention hosted by Holiday Travel to showcase Flight's new passenger jet. Gavin, who is authorized to make statements about the aircraft, makes false claims about its capability. Liability for injuries or damage to third parties who rely on the false claims extends to

Accepted Answer

A)  Holiday Travel only.
B)  Flight Craft and Gavin only.
C)  Flight Craft only.
D)  Gavin only.

Exam 32: Agency Formation and Duties

If an e-agent fails to provide an on-screen confirmation of a purchase, the other party to the transaction can void the effect of any errors by avoiding the deal.

Anything that an agent obtains by virtue of an agency relationship is held in a constructive trust and thereby belongs to

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn. Jess orally agrees to do so. This is an agency by

When the relationship between a principal and an independent contractor is not an employment relationship, it is an agency relationship.

For the same reasons that workers may benefit from having employee status, employers may benefit from identifying workers as independent contractors.

Clark hires Dell, a real estate broker, to sell his beach house. The house is destroyed in a storm before it can be sold. Dell is Clark's agent

A gratuitous agent can be liable to a principal for breach of contract, even in the absence of a contract, but not liable for the negligent performance of the deal.

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to the hosts of banquets and other events. In this capacity, Rosario is

In some situations, the courts find an agency relationship where there is no formal agreement.

When a contract involves unusually hazardous activities, a principal can be shielded from liability by using as independent contractor as an agent.

The doctrine of respondeat superior is applied differently to a multi-national corporation than it is to a small-town store with one clerk.

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm. Jon makes a deal with Lila for the sheep, but neither Jon nor Kino pays the price. Lila sues Jon for breach. Jon's right to hold Kino liable for any damages is the right to

In an emergency situation, an agent has the authority to act appropriately under the circumstances.

Rosa introduces Sol to her friend Trey as "my associate." Sol purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sol's actions, it will be because their relationship is

Actual authority in an agency relationship arises from what a principal makes clear to a third party .

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts.

Ana, a sales agent for Bread Company makes claims for a product that the company has told its agents not to make. Croissant Café sues the firm when the product fails to stand up to the claim. The company can sue Ana for

Agency relationships cannot exist outside employment, so agency law has a narrower reach than employment law.