Question 1

Security Armored Car Corporation employs Theo as an agent. Without Security's knowledge but otherwise acting within the scope of employment, Theo commits a crime. The state can successfully prosecute

Accepted Answer

A)  neither Security nor Theo. 
B)  Security only. 
C)  Security or Theo. 
D)  Theo only.

Question 2

Tropical Vittles, LLC, hires Sophie to act as its agent to buy a ten-acre tract of land from Rico for $1,000 per acre. Tropical Vittles does not want Rico to know that it is the principal or that Sophie is its agent. Tropical Vittles wants the land for a new fast-food restaurant, and believes that Rico may not sell the land for that purpose or may demand a premium price. Sophie makes the purchase, signing only her name to the contract as the buyer and not disclosing to Rico the agency relationship. The transfer of the deed is to occur on May 1. Rico learns of Tropical Vittles's identity on April 15. Can Rico legally refuse to deed the property on May 1 Explain.

Accepted Answer

The answer of Tropical Vittles, LLC, hires Sophie to act...

Question 3

A partially disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

Accepted Answer

A) True 
 B)False

Question 4

An agent's authority to act on behalf of a principal must be actual and apparent.

Accepted Answer

A) True 
 B)False

Question 5

Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house burns down before being sold. The agency agreement is likely

Accepted Answer

A)  still in force if Frida gives Gert additional consideration. 
B)  still in force if Gert does not tell prospective customers. 
C)  terminated by mutual consent of the parties. 
D)  terminated by operation of law.

Question 6

BizOnline.com uses an electronic agent, or e-agent, to perform certain tasks in e-commerce. With respect to the e-agent's actions, BizOnline.com is bound by

Accepted Answer

A)  all of the actions. 
B)  only those actions of which BizOnline.com is aware. 
C)  only those actions that BizOnline.com does not refute. 
D)  only those actions that BizOnine.com ratifies.

Question 7

Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by

Accepted Answer

A)  an inference from the position Sonia occupies. 
B)  any inference a reasonable customer or supplier would make. 
C)  any inference Sonia chooses to make. 
D)  no inference.

Question 8

Rupert, an agent for Star Productions, Inc., enters into an unauthorized contract with Theatrical Transport Corporation purportedly on behalf of Star, which refuses to perform. Rupert is liable

Accepted Answer

A)  for breach of contract to Star and Theatrical Transport. 
B)  for misrepresentation to Star only. 
C)  for misrepresentation to Theatrical Transport only. 
D)  to no one.

Question 9

Emery is an agent for Downtown Market Corporation. Emery makes an innocent misrepresentation when entering into a contract on behalf of Downtown Market with Cool Fruits, Inc. Cool Fruits

Accepted Answer

A)  is directly responsible for performing the contract. 
B)  is estopped from performing the contract. 
C)  may rescind the contract. 
D)  must ratify the contract.

Question 10

An agency coupled with an interest is an agency created for the agent's benefit.

Accepted Answer

A) True 
 B)False

Question 11

A power of attorney can be special or general.

Accepted Answer

A) True 
 B)False

Question 12

Fabulous Auto Sales, Inc., employs GR8 Collection Company as a collection agent. While repossessing a car from Hadji, one of Fabulous's customers, GR8 causes an accident in which Hadji is injured. Hadji can recover from

Accepted Answer

A)  Fabulous only. 
B)  Fabulous or GR8. 
C)  GR8 only. 
D)  Hadji's insurance company only.

Question 13

Clive is a purchasing agent for Double D Ranch with the authority to buy cattle at a certain auction. After the cattle are bought, the agency relationship terminates

Accepted Answer

A)  automatically. 
B)  following notice to all actual cattle sellers. 
C)  following notice to all potential cattle sellers. 
D)  following published notice in a local newspaper.

Question 14

Fact Pattern 33-1A
Ulani indicates that she is acting as an agent on behalf of an unidentified client—Thoroughbred Stallions, LLC—when she enters into a contract with Shana.
-Refer to Fact Pattern 33-1A. Liability to Shana for nonperformance of the contract may be imposed on

Accepted Answer

A)  neither Ulani nor Thoroughbred Stallions. 
B)  Ulani and Thoroughbred Stallions. 
C)  Ulani only. 
D)  Thoroughbred Stallions only.

Question 15

An agent's implied authority can contradict his or her express authority.

Accepted Answer

A) True 
 B)False

Question 16

An agent's authority must be express for the agent's act to bind a principal.

Accepted Answer

A) True 
 B)False

Question 17

Omar hires Petra, 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 increase considerably. The agency agreement is likely

Accepted Answer

A)  still in force if Omar gives Petra additional consideration. 
B)  still in force if Petra does not tell prospective customers. 
C)  terminated by mutual consent of the parties. 
D)  terminated by operation of law.

Question 18

A principal whose identity is known by a third party with whom an agent contracts on the principal's behalf is a disclosed principal.

Accepted Answer

A) True 
 B)False

Question 19

Before a principal can ratify a contract, the third party must withdraw from the deal.

Accepted Answer

A) True 
 B)False

Question 20

Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has

Accepted Answer

A)  apparent authority. 
B)  express authority. 
C)  implied authority. 
D)  no authority.

Exam 33: Agency Liability and Termination

Security Armored Car Corporation employs Theo as an agent. Without Security's knowledge but otherwise acting within the scope of employment, Theo commits a crime. The state can successfully prosecute

A partially disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

An agent's authority to act on behalf of a principal must be actual and apparent.

Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house burns down before being sold. The agency agreement is likely

BizOnline.com uses an electronic agent, or e-agent, to perform certain tasks in e-commerce. With respect to the e-agent's actions, BizOnline.com is bound by

Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by

Rupert, an agent for Star Productions, Inc., enters into an unauthorized contract with Theatrical Transport Corporation purportedly on behalf of Star, which refuses to perform. Rupert is liable

Emery is an agent for Downtown Market Corporation. Emery makes an innocent misrepresentation when entering into a contract on behalf of Downtown Market with Cool Fruits, Inc. Cool Fruits

An agency coupled with an interest is an agency created for the agent's benefit.

A power of attorney can be special or general.

Fabulous Auto Sales, Inc., employs GR8 Collection Company as a collection agent. While repossessing a car from Hadji, one of Fabulous's customers, GR8 causes an accident in which Hadji is injured. Hadji can recover from

Clive is a purchasing agent for Double D Ranch with the authority to buy cattle at a certain auction. After the cattle are bought, the agency relationship terminates

Fact Pattern 33-1A Ulani indicates that she is acting as an agent on behalf of an unidentified client—Thoroughbred Stallions, LLC—when she enters into a contract with Shana. -Refer to Fact Pattern 33-1A. Liability to Shana for nonperformance of the contract may be imposed on

An agent's implied authority can contradict his or her express authority.

An agent's authority must be express for the agent's act to bind a principal.

Omar hires Petra, 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 increase considerably. The agency agreement is likely

A principal whose identity is known by a third party with whom an agent contracts on the principal's behalf is a disclosed principal.

Before a principal can ratify a contract, the third party must withdraw from the deal.

Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has