Question 1

Independent contractors have no control over the details of their work performance.

Accepted Answer

A) True 
 B)False

Question 2

Vicarious liability is direct liability.

Accepted Answer

A) True 
 B)False

Question 3

Limon,an agent for Mindwonder Games LLC,executes an unau-thor-ized contract with NOW Marketing,Inc. The deal is highly ad-vanta-geous to Mindwonder,and the company ratifies the con-tract. The contract is

Accepted Answer

A) valid. 
B) vicarious. 
C) void. 
D) voidable.

Question 4

The relationship between a principal and an independent contractor cannot involve an agency relationship.

Accepted Answer

A) True 
 B)False

Question 5

Geoff serves in a representative capacity for Huck. To accomplish the objectives of this relationship,Geoff's authority can be implied

Accepted Answer

A) by contradiction. 
B) by custom. 
C) by lack of reason. 
D) under no circumstances.

Question 6

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) aprincipal. 
D) anagent.

Question 7

Nadya and Owen work at Purified Water Company. Nadya is a sales representative who works with Purified's customers,including restaurants,grocery stores,and other businesses,as well as individual consumers. Purified closely supervises all of its sales reps,and dictates their schedules. Owen is an engineer who works in Purified's water treatment plant.
-Refer to Fact Pattern 27-1. With respect to third parties,Owen is Purified's

Accepted Answer

A) employee,agent,and independent contractor. 
B) employee and agent. 
C) employee but not agent. 
D) independent contractor.

Question 8

Dimitri,a certified public accountant and an investor,and Elinor,an in-surance salesperson and a realtor,may create an agency relationship for

Accepted Answer

A) a legal business purpose only. 
B) any legal purpose. 
C) any legal or illegal purpose. 
D) no purpose.

Question 9

Jim agrees to act on Joyce's behalf,subject to her control,and Joyce trusts Jim to so act. They set out the terms in a written document,which they both sign. This is

Accepted Answer

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

Question 10

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party.

Accepted Answer

A) True 
 B)False

Question 11

An agency can terminate once its purpose is achieved.

Accepted Answer

A) True 
 B)False

Question 12

Picabo drives a truck as an employee for Quik Delivery,Inc.Picabo would most likely be considered acting outside the scope of her employment if she

Accepted Answer

A) crashed into a car at the airport while off duty. 
B) hit a pedestrian in a parking lot during a "working" lunch. 
C) ran over an attendant at Quik's gas station while refueling the truck. 
D) smashed into a store-front while intoxicated on-duty.

Question 13

Berry indicates that she is acting as an agent on behalf of an unidentified client-Cuisine Catering,LLC-when she enters into a contract with Désean.
-Refer to Fact Pattern 27-2. Liability to Déseanfor nonper-formance of the con-tract may be imposed on

Accepted Answer

A) none of the choices. 
B) Berry and Cuisine Catering. 
C) Berry only. 
D) Cuisine Cateringonly.

Question 14

Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia,however,Ray adds a 50,000-mile warranty. Later,Sylvia sues Quince for breach of warranty. Quince's right to hold Ray liable for any damages he has to pay is the right of

Accepted Answer

A) avoidance. 
B) cooperation. 
C) indemnification. 
D) reimbursement.

Question 15

Spicy Wonder Hot Dog Vendors,Inc.,grants its agent Teona an exclusive terri-tory in which to sell Spicy Wonder Hot Dog products. Spicy Wonder Hot Dog cannot compete with Teona in that territory under the principal's duty of

Accepted Answer

A) compensation. 
B) cooperation. 
C) indemnification. 
D) reimbursement.

Question 16

Watercraft,Inc.,employs Vladimir as a sales agent for a trial period. At the end of the period,Watercraftand 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 17

Churchy hires Danielle,a real estate broker,to act as his agent to sell his land for $150,000. Oil is discovered beneath the land,causing its market value to in-crease considerably. The agency agreement is likely

Accepted Answer

A) continued with a proportionate increase in Danielle's sales commission. 
B) continued until Danielle tells prospective buyers of the discovery. 
C) terminated by act of the parties. 
D) terminated by operation of law.

Question 18

Agency relationships normally are consensual.

Accepted Answer

A) True 
 B)False

Question 19

Berry indicates that she is acting as an agent on behalf of an unidentified client-Cuisine Catering,LLC-when she enters into a contract with Désean.
-Refer to Fact Pattern 27-2. Cuisine Cateringis

Accepted Answer

A) a disclosed principal. 
B) an apparent agent. 
C) an undisclosed principal. 
D) a partially disclosed principal.

Question 20

Cory employs Dash Delivery Agency as an agent under a writ-ten agreement that describes the rights and duties of both parties. This is

Accepted Answer

A) apparent authority. 
B) equal authority. 
C) express authority. 
D) implied authority.

Exam 27: Agency Relationships in Business

Independent contractors have no control over the details of their work performance.

Vicarious liability is direct liability.

Limon,an agent for Mindwonder Games LLC,executes an unau-thor-ized contract with NOW Marketing,Inc. The deal is highly ad-vanta-geous to Mindwonder,and the company ratifies the con-tract. The contract is

The relationship between a principal and an independent contractor cannot involve an agency relationship.

Geoff serves in a representative capacity for Huck. To accomplish the objectives of this relationship,Geoff's authority can be implied

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

Dimitri,a certified public accountant and an investor,and Elinor,an in-surance salesperson and a realtor,may create an agency relationship for

Jim agrees to act on Joyce's behalf,subject to her control,and Joyce trusts Jim to so act. They set out the terms in a written document,which they both sign. This is

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party.

An agency can terminate once its purpose is achieved.

Picabo drives a truck as an employee for Quik Delivery,Inc.Picabo would most likely be considered acting outside the scope of her employment if she

Berry indicates that she is acting as an agent on behalf of an unidentified client-Cuisine Catering,LLC-when she enters into a contract with Désean. -Refer to Fact Pattern 27-2. Liability to Déseanfor nonper-formance of the con-tract may be imposed on

Spicy Wonder Hot Dog Vendors,Inc.,grants its agent Teona an exclusive terri-tory in which to sell Spicy Wonder Hot Dog products. Spicy Wonder Hot Dog cannot compete with Teona in that territory under the principal's duty of

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

Churchy hires Danielle,a real estate broker,to act as his agent to sell his land for $150,000. Oil is discovered beneath the land,causing its market value to in-crease considerably. The agency agreement is likely

Agency relationships normally are consensual.

Berry indicates that she is acting as an agent on behalf of an unidentified client-Cuisine Catering,LLC-when she enters into a contract with Désean. -Refer to Fact Pattern 27-2. Cuisine Cateringis

Cory employs Dash Delivery Agency as an agent under a writ-ten agreement that describes the rights and duties of both parties. This is