Question 1

Circus Pizza contracted with Art to run its birthday parties.Art's responsibilities included supervising the children and organizing the games.Circus did not investigate Art's background,which included a history of assaulting children.Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party.Circus Pizza

Accepted Answer

A)  cannot be liable for the damages because Art committed an unforeseeable intentional tort.
B)  cannot be held liable for the damages because Art's conduct was not in the scope of employment.
C)  may be held liable on the basis of negligent hiring.
D)  may be held liable only if Circus actually knew of Art's background.

Question 2

An agency will be terminated in all but which one of the following situations?

Accepted Answer

A)  The principal and agent agree on an agency relationship to sell a boat,and the boat is sold.
B)  A travel agent files for individual bankruptcy under Chapter 13.
C)  The agent violates his duty of loyalty.
D)  An electrician,an agent of a contractor,has her license revoked.

Question 3

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

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 7

Becky asks her friend Maggie to walk her dog for her,and Maggie agrees.While out walking,the dog gets away from Maggie and runs into Mr.Edwards' garden,digging up some expensive plants.Which statement best characterizes this situation?

Accepted Answer

A)  Becky is liable for the damages to Mr.Edwards' garden,because she exercised control over her agent,Maggie.
B)  Maggie is liable for the damages to Mr.Edwards' garden,because she was walking the dog at the time of the damage.
C)  Neither Becky nor Maggie is liable for the damages to Mr.Edwards' garden because no agency relationship existed between Becky and Maggie.
D)  Both Becky and Maggie are equally liable for the damages to Mr.Edwards' garden--the dog belongs to Becky,but Maggie was walking him at the time of the damage.

Question 8

An agent must obey all instructions of the principal.

Accepted Answer

A) True 
 B)False

Question 9

Mohammad was an employee in the new product development department of Estay Inc.Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months.Estay took great care to keep information concerning the new product a secret.Ceries,Inc. ,a competitor of Estay,persuaded Mohammad to leave Estay to direct Ceries' marketing department.Which statement is correct?

Accepted Answer

A)  Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development.
B)  Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated.
C)  Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule.
D)  Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency.

Question 10

Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

Accepted Answer

A) True 
 B)False

Question 11

Generally,either party to an agency relationship has the power to terminate it at any time.

Accepted Answer

A) True 
 B)False  True

Question 12

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 13

Which of the following is a duty of a principal to an agent?

Accepted Answer

A)  duty of loyalty
B)  duty to indemnify for reasonable expenses
C)  duty to provide information
D)  All of these are correct. B

Question 14

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 15

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Accepted Answer

A) True 
 B)False

Question 16

Jolene hired Lacy to find a buyer for her house.Adam was interested in buying the house.If both Jolene and Adam agree,Lacy,a real estate agent,may represent both parties.

Accepted Answer

A) True 
 B)False

Question 17

How is consent established in an agency relationship?

Accepted Answer

A)  The principal must ask the agent to do something and the agent must agree.
B)  The principal gives consideration to the agent.
C)  The principal and agent must have a written,notarized agreement.
D)  All of these are correct. A

Question 18

The bankruptcy of an agent automatically terminates an agency relationship.

Accepted Answer

A) True 
 B)False

Question 19

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

Accepted Answer

A) True 
 B)False

Question 20

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.

Exam 28: Agency Law

Correct Answer
verified

An agency will be terminated in all but which one of the following situations?

Correct Answer
verified

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

Correct Answer
verified

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

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

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

Becky asks her friend Maggie to walk her dog for her,and Maggie agrees.While out walking,the dog gets away from Maggie and runs into Mr.Edwards' garden,digging up some expensive plants.Which statement best characterizes this situation?

Correct Answer
verified

An agent must obey all instructions of the principal.

Correct Answer
verified

Correct Answer
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Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

Correct Answer
verified

Generally,either party to an agency relationship has the power to terminate it at any time.

Correct Answer
verified
True

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

Correct Answer
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Which of the following is a duty of a principal to an agent?

Correct Answer
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B

What is the best definition of a fiduciary relationship?

Correct Answer
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If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Correct Answer
verified

Jolene hired Lacy to find a buyer for her house.Adam was interested in buying the house.If both Jolene and Adam agree,Lacy,a real estate agent,may represent both parties.

Correct Answer
verified

How is consent established in an agency relationship?

Correct Answer
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A

The bankruptcy of an agent automatically terminates an agency relationship.

Correct Answer
verified

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

Correct Answer
verified

Correct Answer
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Exam 28: Agency Law

Correct AnswerverifiedShow Answer

An agency will be terminated in all but which one of the following situations?

Correct AnswerverifiedShow Answer

If a person accepts the benefits of an unauthorized transaction,or fails to repudiate it,then he is bound by the act as if he had originally authorized it.

Correct AnswerverifiedShow Answer

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

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

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

Becky asks her friend Maggie to walk her dog for her,and Maggie agrees.While out walking,the dog gets away from Maggie and runs into Mr.Edwards' garden,digging up some expensive plants.Which statement best characterizes this situation?

Correct AnswerverifiedShow Answer

An agent must obey all instructions of the principal.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Erica's supervisor told her to arrange for a conference room at the Kelly Inn.Erica has express authority to contract for the room.

Correct AnswerverifiedShow Answer

Generally,either party to an agency relationship has the power to terminate it at any time.

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

Which of the following is a duty of a principal to an agent?

Correct AnswerverifiedB

What is the best definition of a fiduciary relationship?

Correct AnswerverifiedShow Answer

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Correct AnswerverifiedShow Answer

Jolene hired Lacy to find a buyer for her house.Adam was interested in buying the house.If both Jolene and Adam agree,Lacy,a real estate agent,may represent both parties.

Correct AnswerverifiedShow Answer

How is consent established in an agency relationship?

Correct AnswerverifiedA

The bankruptcy of an agent automatically terminates an agency relationship.

Correct AnswerverifiedShow Answer

Kaiya is a sales representative of TriColor.Kaiya owes a fiduciary duty to TriColor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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True

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B

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A

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