Question 1

An agent may not engage in inappropriate behavior that reflects badly on the principal. This rule applies to conduct

Accepted Answer

A)  during working hours.
B)  during off-duty time.
C)  during both working hours and off-duty time.
D)  only by public officials.

Question 2

When a principal is partially disclosed

Accepted Answer

A)  the agent and principal will be jointly and severally liable on the contract.
B)  the agent and principal will be only jointly liable on the contract.
C)  only the principal can be liable.
D)  only the agent is liable.

Question 3

Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15-year-old boy, to operate an industrial machine. Hiring the 15-year-old violates the child labor laws. What should Tom do in this situation?

Accepted Answer

A)  Tom should hire Elton; he has a duty to obey Esday's instructions.
B)  Tom should hire Elton; he has a duty of care to ensure that the government does not discover that Elton is 15 years old.
C)  Tom should not hire Elton; he has a duty of care and he would not be caring for Elton.
D)  Tom should not hire Elton; he has a duty to obey Esday's instructions only if they are legal and ethical.

Question 4

An agent must obey all instructions of the principal.

Accepted Answer

A) True 
 B)False

Question 5

Luther (principal) and Marcia (agent) have an agency relationship. Under which circumstances will the relationship end "at will."

Accepted Answer

A)  Luther and Marcia agree their agency relationship will last two years. At the end of that time, the agency relationship is terminated.
B)  Luther and Marcia made no agreement in advance about the term of the agreement. One afternoon, Marcia is tragically killed in an automobile accident.
C)  Luther and Marcia agree their agency relationship will last two years. One year into the relationship, they meet for lunch and decide the relationship isn't working and both agree to end it.
D)  Luther and Marcia made no agreement in advance about the term of the agreement. One day, Luther calls Marcia and tells her he no longer wishes her to be his agent.

Question 6

Pamela hired Lena to sell her business. Lena

Accepted Answer

A)  can buy the business as long as the price is fair.
B)  can buy the business as long as she qualifies for financing.
C)  can buy the business only with Pamela's permission.
D)  cannot buy the business under any circumstances.

Question 7

Chance is a traveling marketing representative for a publishing company. He is an independent contractor and was hired without negligence. One afternoon while driving to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is injured. Judy can

Accepted Answer

A)  hold both Chance and his company liable for her injury.
B)  hold the company but not Chance liable.
C)  hold Chance but not the company liable.
D)  not hold Chance or his company liable for her injury.

Question 8

Cameron, editor of the local newspaper, assigned to Jim the writing of a story about pollution of a nearby stream. Although Jim used reasonable care in gathering and checking his information, unknown to Jim, the story contained a defamatory statement about Maureen. Maureen reads the story and sues Jim for libel. Cameron, who read and published the story

Accepted Answer

A)  must indemnify Jim for Maureen's claim.
B)  need not indemnify Jim for Maureen's claim because Jim should have checked his facts more carefully.
C)  need not indemnify Jim for Maureen's claim because Jim breached his duty to obey instructions.
D)  can recover damages from Jim for any injury to the newspaper resulting from Jim's story.

Question 9

The bankruptcy of an agent automatically terminates an agency relationship.

Accepted Answer

A) True 
 B)False

Question 10

Andrew has been hired to do some work for Rossi Enterprises. What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Accepted Answer

In determining if agents are employees o...

Question 11

You cannot be held liable for the actions of your agents if the agents are violating your instructions.

Accepted Answer

A) True 
 B)False

Question 12

Grant is a delivery person for Watkins Furniture. One day, after delivering a chair to Nadine's house, he stopped at a fast food restaurant to get a sandwich at the drive-through window. As he was leaving the parking lot, he accidentally hit the rear of Blanche's car. Discuss the possible liability of Watkins for Grant's accident. Would there be any difference in the potential liability of Watkins if Grant had the accident after driving 30 miles away to visit a friend?

Accepted Answer

The major issue here is abandonment. Wat...

Question 13

As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal.

Accepted Answer

A) True 
 B)False

Question 14

Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of

Accepted Answer

A)  apparent authority.
B)  respondeat superior.
C)  intermediary agency.
D)  express authority.

Question 15

The principle of liability stating that an employer is liable for a physical tort committed by an employee acting within the scope of employment and a nonphysical tort of an employee acting with authority is called

Accepted Answer

A)  the equal dignities rule.
B)  respondeat superior.
C)  fiduciary control.
D)  apparent authority.

Question 16

Which of the following states that if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written?

Accepted Answer

A)  duty to obey instructions
B)  balanced contract rule
C)  fiduciary duty
D)  equal dignities rule

Question 17

John hired Tim to sell his house. Which statement is correct?

Accepted Answer

A)  John is Tim's principal.
B)  Tim, but not John, can terminate the agency relationship.
C)  John, but not Tim, can terminate the agency relationship.
D)  Tim is John's principal.

Question 18

What is the best definition of a fiduciary relationship?

Accepted Answer

A)  The principal pays the agent to act on his or her behalf.
B)  The principal grants an agent permission to act, either by words or conduct.
C)  A principal is liable for certain torts committed by an agent.
D)  The trustee must act in the best interests of the beneficiary.

Question 19

HBR Accounting hired Denise, a CPA, to prepare tax returns. Which statement is correct?

Accepted Answer

A)  Denise is a gratuitous agent and has a duty not to commit gross negligence.
B)  Denise is a gratuitous agent and has a duty not to commit ordinary negligence.
C)  Denise, as a CPA, is an agent with special skills. She is held to a higher standard than ordinary negligence.
D)  Denise, as a CPA, is an agent with special skills. She is held to a lower standard than ordinary negligence.

Question 20

Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob.

Accepted Answer

A) True 
 B)False

Exam 17: Agency Law

Correct Answer
verified

John hired Tim to sell his house. Which statement is correct?

Correct Answer
verified

Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of

Correct Answer
verified

Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob.

Correct Answer
verified

The bankruptcy of an agent automatically terminates an agency relationship.

Correct Answer
verified

When a principal is partially disclosed

Correct Answer
verified

HBR Accounting hired Denise, a CPA, to prepare tax returns. Which statement is correct?

Correct Answer
verified

The principle of liability stating that an employer is liable for a physical tort committed by an employee acting within the scope of employment and a nonphysical tort of an employee acting with authority is called

Correct Answer
verified

Pamela hired Lena to sell her business. Lena

Correct Answer
verified

Chance is a traveling marketing representative for a publishing company. He is an independent contractor and was hired without negligence. One afternoon while driving to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is injured. Judy can

Correct Answer
verified

Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15-year-old boy, to operate an industrial machine. Hiring the 15-year-old violates the child labor laws. What should Tom do in this situation?

Correct Answer
verified

What is the best definition of a fiduciary relationship?

Correct Answer
verified

As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal.

Correct Answer
verified

An agent may not engage in inappropriate behavior that reflects badly on the principal. This rule applies to conduct

Correct Answer
verified

Correct Answer
verified
The major issue here is abandonment. Wat...
View Answer

Andrew has been hired to do some work for Rossi Enterprises. What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Correct Answer
verified
In determining if agents are employees o...
View Answer

Which of the following states that if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written?

Correct Answer
verified

Luther (principal) and Marcia (agent) have an agency relationship. Under which circumstances will the relationship end "at will."

Correct Answer
verified

An agent must obey all instructions of the principal.

Correct Answer
verified

You cannot be held liable for the actions of your agents if the agents are violating your instructions.

Correct Answer
verified

Exam 17: Agency Law

Correct AnswerverifiedShow Answer

John hired Tim to sell his house. Which statement is correct?

Correct AnswerverifiedShow Answer

Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of

Correct AnswerverifiedShow Answer

Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob.

Correct AnswerverifiedShow Answer

The bankruptcy of an agent automatically terminates an agency relationship.

Correct AnswerverifiedShow Answer

When a principal is partially disclosed

Correct AnswerverifiedShow Answer

HBR Accounting hired Denise, a CPA, to prepare tax returns. Which statement is correct?

Correct AnswerverifiedShow Answer

The principle of liability stating that an employer is liable for a physical tort committed by an employee acting within the scope of employment and a nonphysical tort of an employee acting with authority is called

Correct AnswerverifiedShow Answer

Pamela hired Lena to sell her business. Lena

Correct AnswerverifiedShow Answer

Chance is a traveling marketing representative for a publishing company. He is an independent contractor and was hired without negligence. One afternoon while driving to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is injured. Judy can

Correct AnswerverifiedShow Answer

Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15-year-old boy, to operate an industrial machine. Hiring the 15-year-old violates the child labor laws. What should Tom do in this situation?

Correct AnswerverifiedShow Answer

What is the best definition of a fiduciary relationship?

Correct AnswerverifiedShow Answer

As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal.

Correct AnswerverifiedShow Answer

An agent may not engage in inappropriate behavior that reflects badly on the principal. This rule applies to conduct

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe major issue here is abandonment. Wat...View AnswerShow Answer

Andrew has been hired to do some work for Rossi Enterprises. What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Correct AnswerverifiedIn determining if agents are employees o...View AnswerShow Answer

Which of the following states that if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written?

Correct AnswerverifiedShow Answer

Luther (principal) and Marcia (agent) have an agency relationship. Under which circumstances will the relationship end "at will."

Correct AnswerverifiedShow Answer

An agent must obey all instructions of the principal.

Correct AnswerverifiedShow Answer

You cannot be held liable for the actions of your agents if the agents are violating your instructions.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The major issue here is abandonment. Wat...
View Answer

Correct Answer
verified
In determining if agents are employees o...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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