Question 1

Fact Pattern 32-2
Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations.
-Refer to Fact Pattern 32-2. At the shop, Faye is​

Accepted Answer

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

Question 2

Don is Equipment Repair Company's chief executive officer. On Equipment Repair's behalf, Don solicits business, hires and fires workers, and handles finances. With respect to Equipment Repair, Don is most likely​

Accepted Answer

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

Question 3

Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand​

Accepted Answer

A)  ​a constructive trust. 
B)  ​an accounting. 
C)  ​nothing. 
D)  ​specific performance.

Question 4

Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales's right not to perform a contract entered into by Jeremy, if he breaches their agency agreement, is the right of​

Accepted Answer

A)  ​avoidance. 
B)  ​indemnification. 
C)  ​nullification. 
D)  ​termination.

Question 5

Ray is a delivery driver for Sicilian Pasta Company. Ray does exactly what the company tells him. Ray is​

Accepted Answer

A)  ​an employee. 
B)  ​a work for hire. 
C)  ​an independent contractor. 
D)  ​a principal.

Question 6

Desmond agrees to act as Evie's agent in settlement negotiations with Fawlty Investment Company. Desmond works out a profitable compromise for Evie, but deposits the company's payment in his own account and refuses to give it to Evie. She files a suit against Desmond. What remedies might the court impose?

Accepted Answer

The answer of Desmond agrees to act as Evie's agent...

Question 7

A person does not need contractual capacity to be an agent.

Accepted Answer

A) True 
 B)False

Question 8

Ralphy is a minor. In most states, Ralphy may not be​

Accepted Answer

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

Question 9

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is​

Accepted Answer

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

Question 10

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf. In this relationship, Jewelry & Coin is​

Accepted Answer

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

Question 11

The term fiduciary is at the heart of agency law.​

Accepted Answer

A) True 
 B)False

Question 12

Brenda, a salesperson at a Cabinets & Countertops store, tells D'Antoni, a customer, "Buy your cabinets here, and I'll install them for half of what the store would charge." D'Antoni buys the cabinets, which Brenda installs for half the store's price. Brenda keeps the money. Brenda has breached​

Accepted Answer

A)  ​no duty. 
B)  ​the agent's duty of loyalty. 
C)  ​the principal's duty of indemnification. 
D)  ​the agent's duty of obedience.

Question 13

A principal owes an agent a duty of estoppel.

Accepted Answer

A) True 
 B)False

Question 14

​Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is

Accepted Answer

A)  ​an agent. 
B)  ​an employee. 
C)  ​an employer. 
D)  ​a principal.

Question 15

Unless an agent does not act in exchange for payment, the principal must pay the agreed-on value for the agent's services.

Accepted Answer

A) True 
 B)False

Question 16

Ingmar asks Jessie to contract with Jessie's high school classmates to babysit Ingmar's new baby. Jessie orally agrees to do so. This is​

Accepted Answer

A)  ​an agency by agreement. 
B)  ​an agency by estoppel. 
C)  ​an agency by ratification. 
D)  ​not an agency relationship.

Question 17

Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is​

Accepted Answer

A)  ​liable, because notice to Emmett is notice to Fridley. 
B)  ​liable, because notice to Glover is notice to Fridley. 
C)  ​not liable, because Emmett did not notify Fridley of the tax. 
D)  ​not liable, because Glover did not tell Fridley about the tax.

Question 18

Dewey is a corporate officer of Energy Corporation. Dewey serves in a representative capacity for the corporation's owners. With respect to binding the corporation to contracts, Dewey is​

Accepted Answer

A)  ​an agent and has the authority. 
B)  ​an employee and does not have the authority. 
C)  ​an independent contractor and does not have the authority. 
D)  ​not an agent, an employee, or an independent contractor but does have the authority.

Question 19

If a great degree of skill is required, this may indicate that a person is an employee hired for a specialized job and not an independent contractor.

Accepted Answer

A) True 
 B)False

Question 20

When the principal-agent relationship is not contractual, the agent has no right to specific performance.

Accepted Answer

A) True 
 B)False

Exam 32: Agency Formation and Duties

Don is Equipment Repair Company's chief executive officer. On Equipment Repair's behalf, Don solicits business, hires and fires workers, and handles finances. With respect to Equipment Repair, Don is most likely​

Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand​

Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales's right not to perform a contract entered into by Jeremy, if he breaches their agency agreement, is the right of​

Ray is a delivery driver for Sicilian Pasta Company. Ray does exactly what the company tells him. Ray is​

A person does not need contractual capacity to be an agent.

Ralphy is a minor. In most states, Ralphy may not be​

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is​

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf. In this relationship, Jewelry & Coin is​

The term fiduciary is at the heart of agency law.​

Brenda, a salesperson at a Cabinets & Countertops store, tells D'Antoni, a customer, "Buy your cabinets here, and I'll install them for half of what the store would charge." D'Antoni buys the cabinets, which Brenda installs for half the store's price. Brenda keeps the money. Brenda has breached​

A principal owes an agent a duty of estoppel.

​Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is

Unless an agent does not act in exchange for payment, the principal must pay the agreed-on value for the agent's services.

Ingmar asks Jessie to contract with Jessie's high school classmates to babysit Ingmar's new baby. Jessie orally agrees to do so. This is​

Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is​

Dewey is a corporate officer of Energy Corporation. Dewey serves in a representative capacity for the corporation's owners. With respect to binding the corporation to contracts, Dewey is​

If a great degree of skill is required, this may indicate that a person is an employee hired for a specialized job and not an independent contractor.

When the principal-agent relationship is not contractual, the agent has no right to specific performance.

Don is Equipment Repair Company's chief executive officer. On Equipment Repair's behalf, Don solicits business, hires and fires workers, and handles finances. With respect to Equipment Repair, Don is most likely

Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand

Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales's right not to perform a contract entered into by Jeremy, if he breaches their agency agreement, is the right of

Ray is a delivery driver for Sicilian Pasta Company. Ray does exactly what the company tells him. Ray is

Ralphy is a minor. In most states, Ralphy may not be

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf. In this relationship, Jewelry & Coin is

The term fiduciary is at the heart of agency law.

Brenda, a salesperson at a Cabinets & Countertops store, tells D'Antoni, a customer, "Buy your cabinets here, and I'll install them for half of what the store would charge." D'Antoni buys the cabinets, which Brenda installs for half the store's price. Brenda keeps the money. Brenda has breached

Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is

Ingmar asks Jessie to contract with Jessie's high school classmates to babysit Ingmar's new baby. Jessie orally agrees to do so. This is

Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is

Dewey is a corporate officer of Energy Corporation. Dewey serves in a representative capacity for the corporation's owners. With respect to binding the corporation to contracts, Dewey is