Question 1

Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be

Accepted Answer

A)   partly successful.
B)   partly unsuccessful.
C)   totally successful.
D)   totally unsuccessful.E) C) and D)
F) B) and C)

Question 2

An agency can terminate once its purpose is achieved.

Accepted Answer

A) True 
 B)False

Question 3

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.E) A) and D)
F) B) and C)

Question 4

Through agents, a principal can conduct multiple business operations simultaneously.

Accepted Answer

A) True 
 B)False

Question 5

Generally, the agent owes the principal no duties.

Accepted Answer

A) True 
 B)False

Question 6

Authority declared in clear, direct, definite terms is express authority.

Accepted Answer

A) True 
 B)False

Question 7

When an agency relationship is terminated, the principal has a duty to personally notify third parties who knew of its existence.

Accepted Answer

A) True 
 B)False

Question 8

An independent contractor is an employee.

Accepted Answer

A) True 
 B)False

Question 9

It is basic tenet of agency law that notice to the agent is notice to the principal.

Accepted Answer

A) True 
 B)False

Question 10

Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi, a court will not con?sider whether

Accepted Answer

A)   Brad was acting within the scope of the agency.
B)   Brad was acting within the scope of his employment.
C)   Custodial authorized the act.
D)   Custodial was personally at fault.E) All of the above
F) None of the above

Question 11

An agency relationship created for an illegal purpose is enforceable.

Accepted Answer

A) True 
 B)False

Question 12

An agency relationship may occur by operation of law in a family.

Accepted Answer

A) True 
 B)False

Question 13

For an agent's implied authority to be effective, a principal must ratify it.

Accepted Answer

A) True 
 B)False

Question 14

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on

Accepted Answer

A)   any transaction causing a loss to Miklos.
B)   Miklos's death or incapacity.
C)   Miklos's sixty-fifth birthday.
D)   Nathalie's handling of one of each stipulated transaction.E) A) and B)
F) A) and C)

Question 15

An independent contractor is an employer who controls his or her agent's performance.

Accepted Answer

A) True 
 B)False

Question 16

Real estate brokers are independent contractors.

Accepted Answer

A) True 
 B)False

Question 17

Cory employs Daily 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.E) B) and C)
F) C) and D)

Question 18

Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to affirm the contract. 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.E) A) and B)
F) All of the above

Question 19

Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the

Accepted Answer

A)   employee.
B)   independent contractor.
C)   principal.
D)   agent.E) A) and B)
F) C) and D)

Question 20

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)   power of attorney.E) B) and C)
F) None of the above

Exam 28: Agency Relationships in Business

Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi, a court will not con?sider whether

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When an agency relationship is terminated, the principal has a duty to personally notify third parties who knew of its existence.

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It is basic tenet of agency law that notice to the agent is notice to the principal.

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An independent contractor is an employer who controls his or her agent's performance.

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

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For an agent's implied authority to be effective, a principal must ratify it.

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An independent contractor is an employee.

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Authority declared in clear, direct, definite terms is express authority.

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Generally, the agent owes the principal no duties.

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An agency can terminate once its purpose is achieved.

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An agency relationship may occur by operation of law in a family.

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An agency relationship created for an illegal purpose is enforceable.

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Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the

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Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to affirm the contract. This is

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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

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Real estate brokers are independent contractors.

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Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on

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Bud approves on behalf of Cody-but without authorization-a contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be

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

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Through agents, a principal can conduct multiple business operations simultaneously.

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