Question 1

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 2

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 3

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 4

Normally, employees who deal with third parties are deemed to be agents.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies.

Accepted Answer

A) True 
 B)False

Question 7

Generally, the law assumes that the principal is aware of any information acquired by the agent that is relevant to the agency.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

An agent is not authorized to act instead of a principal in doing business with third parties.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve'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 12

Kevin is an agent for Lookout Mountain Accountants, Inc. On Lookout Mountain's behalf and at its request, Kevin pays Nathan for software designed for the management of Lookout Mountain's services. Kevin's right to obtain the amount of those payments from Lookout Mountain arises under the principal's duty of​

Accepted Answer

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

Question 13

Fact Pattern 9-2
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 9-2.Garage Door hires Janitorial Service Company to clean the store. Garage Door gives Janitorial Service instructions as to what needs to be cleaned and when. With respect to Garage Door, Janitorial Service is​

Accepted Answer

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

Question 14

Agency relationships can exist between employers and independent contractors.

Accepted Answer

A) True 
 B)False

Question 15

Denny, a certified public accountant and an investor, and Ethel, an insurance salesperson and a realtor, may create an agency relationship for​

Accepted Answer

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

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

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

Accepted Answer

A) True 
 B)False

Question 18

Spicy Wonder Hot Dog Vendors, Inc., grants its agent Teona an exclusive territory 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 19

If work is usually done under the employer's direction, this indicates independent-contractor status.

Accepted Answer

A) True 
 B)False

Question 20

Lorena is appointed as an agent for Milled Grains, Inc. The agency agreement is silent as to the level of sales that Lorena is expected to achieve. She must​

Accepted Answer

A)  ​achieve nothing because the agreement says nothing on the issue. 
B)  ​attain the level that Lorena achieved with her previous employer. 
C)  ​maintain the level Milled Grains attained before Lorena became an agent. 
D)  ​use reasonable diligence and skill in selling.

Exam 9: Agency Formation and Duties

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​

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

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

Normally, employees who deal with third parties are deemed to be agents.

Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies.

Generally, the law assumes that the principal is aware of any information acquired by the agent that is relevant to the agency.

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

An agent is not authorized to act instead of a principal in doing business with third parties.

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​

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve's actions, it will be because their relationship is​

Agency relationships can exist between employers and independent contractors.

Denny, a certified public accountant and an investor, and Ethel, an insurance salesperson and a realtor, may create an agency relationship for​

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​

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

Spicy Wonder Hot Dog Vendors, Inc., grants its agent Teona an exclusive territory 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​

If work is usually done under the employer's direction, this indicates independent-contractor status.

Lorena is appointed as an agent for Milled Grains, Inc. The agency agreement is silent as to the level of sales that Lorena is expected to achieve. She must​

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

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

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

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve's actions, it will be because their relationship is

Denny, a certified public accountant and an investor, and Ethel, an insurance salesperson and a realtor, may create an agency relationship for

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

Spicy Wonder Hot Dog Vendors, Inc., grants its agent Teona an exclusive territory 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

Lorena is appointed as an agent for Milled Grains, Inc. The agency agreement is silent as to the level of sales that Lorena is expected to achieve. She must