Question 1

An agent is authorized to act on behalf of a principal in doing business with third parties.

Accepted Answer

A) True 
 B)False

Question 2

Ella agrees to act as Fab's agent in settlement negotiations with Global In?surance Company. Ella works out a profitable compromise for Fab, but deposits the company's payment in her own account and refuses to give it to Fab. Fab files a suit against Ella. What remedies might the court impose?

Accepted Answer

Possible remedies include the normal con...

Question 3

Macro Corporation and National Purchasing Company may create an agency agreement

Accepted Answer

A)   by conduct, in writing, or orally.
B)   by conduct or orally only.
C)   in writing only.
D)   under no circumstances.

Question 4

Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached

Accepted Answer

A)   no duty.
B)   the duty of accounting.
C)   the duty of loyalty.
D)   the duty of notification.

Question 5

KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's

Accepted Answer

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

Question 6

Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of

Accepted Answer

A)   a person having those skills.
B)   an average, unskilled person.
C)   a reasonable person.
D)   the principal.

Question 7

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Accepted Answer

A) True 
 B)False

Question 8

A principal owes an agent a duty of accounting.

Accepted Answer

A) True 
 B)False

Question 9

Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore is

Accepted Answer

A)   an agent and has the authority.
B)   an agent but does not have the authority.
C)   not an agent and does not have the authority.
D)   not an agent but does have the authority.

Question 10

A fiduciary relationship allows the parties to avoid obligations without liability.

Accepted Answer

A) True 
 B)False

Question 11

A minor can be an agent.

Accepted Answer

A) True 
 B)False

Question 12

A minor cannot be appointed as an agent.

Accepted Answer

A) True 
 B)False

Question 13

Fact Pattern 31-1B 
Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not au?thorized to modify the prices or other terms of a sale at the shop.
-Refer to Fact Pattern 31-1B. Nia hires O'Reilly's Carpet Company to clean the carpets of her shop. Nia gives O'Reilly's instructions as to what needs to be cleaned and when. O'Reilly's is

Accepted Answer

A)   an independent contractor.
B)   Nia's employee only.
C)   Nia's employee and agent.
D)   Nia's principal.

Question 14

Irma retains Jerry as her authorized agent, unaware that Jerry is a mi?nor. Jerry enters into a contract with Ken on Irma's be?half. The contract is

Accepted Answer

A)   binding on Irma.
B)   binding on Jerry and Ken, but not Irma.
C)   binding on Ken, but not Irma or Jerry.
D)   void.

Question 15

Fact Pattern 31-1B 
Liz and Molly work as clerks in Nia's Dress Shop. Nia withholds federal taxes from their pay, and controls the methods and details of the performance of their work. Liz and Molly are not au?thorized to modify the prices or other terms of a sale at the shop.
-Refer to Fact Pattern 31-1B. Nia authorizes Liz to sell clothes at remote lo?cations at prices that Liz negotiates in those locations. With respect to sales at those locations, Liz is

Accepted Answer

A)   an independent contractor.
B)   Nia's employee only.
C)   Nia's employee and agent.
D)   Nia's principal.

Question 16

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

Accepted Answer

A)   no duty.
B)   the duty of loyalty.
C)   the duty of notification.
D)   the duty of obedience.

Question 17

Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela 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)   an agency by ratification.
D)   not the creation of an agency relationship.

Question 18

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Accepted Answer

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

Question 19

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under

Accepted Answer

A)   the doctrine of estoppel.
B)   the equal dignity rule.
C)   the fiduciary principle.
D)   the good faith statute.

Question 20

Dan, an agent for Eve, signs an agreement with Fred on Eve's behalf but ne?glects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is

Accepted Answer

A)   liable, because Dan's knowledge is imputed to Eve.
B)   liable, because Fred's knowledge is imputed to Eve.
C)   not liable, because Dan did not tell Eve about the tax.
D)   not liable, because Fred did not tell Eve about the tax.

Exam 31: Agency Formation and Duties

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Correct Answer
verified

Correct Answer
verified

A minor cannot be appointed as an agent.

Correct Answer
verified

A fiduciary relationship allows the parties to avoid obligations without liability.

Correct Answer
verified

A minor can be an agent.

Correct Answer
verified

Dan, an agent for Eve, signs an agreement with Fred on Eve's behalf but ne?glects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is

Correct Answer
verified

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

Correct Answer
verified

KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's

Correct Answer
verified

Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore is

Correct Answer
verified

An agent is authorized to act on behalf of a principal in doing business with third parties.

Correct Answer
verified

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under

Correct Answer
verified

Correct Answer
verified

Macro Corporation and National Purchasing Company may create an agency agreement

Correct Answer
verified

Ella agrees to act as Fab's agent in settlement negotiations with Global In?surance Company. Ella works out a profitable compromise for Fab, but deposits the company's payment in her own account and refuses to give it to Fab. Fab files a suit against Ella. What remedies might the court impose?

Correct Answer
verified
Possible remedies include the normal con...
View Answer

Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached

Correct Answer
verified

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

Correct Answer
verified

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Correct Answer
verified

A principal owes an agent a duty of accounting.

Correct Answer
verified

Irma retains Jerry as her authorized agent, unaware that Jerry is a mi?nor. Jerry enters into a contract with Ken on Irma's be?half. The contract is

Correct Answer
verified

Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of

Correct Answer
verified

Exam 31: Agency Formation and Duties

There does not need to be a written agreement between two parties to cre?ate an agency relationship.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A minor cannot be appointed as an agent.

Correct AnswerverifiedShow Answer

A fiduciary relationship allows the parties to avoid obligations without liability.

Correct AnswerverifiedShow Answer

A minor can be an agent.

Correct AnswerverifiedShow Answer

Dan, an agent for Eve, signs an agreement with Fred on Eve's behalf but ne?glects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is

Correct AnswerverifiedShow Answer

Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of what the store would charge." Dita buys the carpet, which Bob in?stalls for half the store's price. Bob keeps the money. Bob has breached

Correct AnswerverifiedShow Answer

KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's

Correct AnswerverifiedShow Answer

Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore is

Correct AnswerverifiedShow Answer

An agent is authorized to act on behalf of a principal in doing business with third parties.

Correct AnswerverifiedShow Answer

Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends. If Jill is liable for Kelly's actions, it will be under

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Macro Corporation and National Purchasing Company may create an agency agreement

Correct AnswerverifiedShow Answer

Ella agrees to act as Fab's agent in settlement negotiations with Global In?surance Company. Ella works out a profitable compromise for Fab, but deposits the company's payment in her own account and refuses to give it to Fab. Fab files a suit against Ella. What remedies might the court impose?

Correct AnswerverifiedPossible remedies include the normal con...View AnswerShow Answer

Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Rita is appointed as an agent for Superior Sales, Inc. The agency agree?ment is silent as to the level of sales that Rita is expected to achieve. She must

Correct AnswerverifiedShow Answer

A principal owes an agent a duty of accounting.

Correct AnswerverifiedShow Answer

Irma retains Jerry as her authorized agent, unaware that Jerry is a mi?nor. Jerry enters into a contract with Ken on Irma's be?half. The contract is

Correct AnswerverifiedShow Answer

Jay holds himself out as possessing special accounting skills. As an agent, he must exercise the degree of skill or care expected of

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
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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
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Correct Answer
verified
Possible remedies include the normal con...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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