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Exam 23: Agency Relationships in Business

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Question 31

Multiple Choice

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Bubbly Soda Company hires Carlo to work on Bubbly's shipping dock,checking outgoing loads and dispatching Bubbly's drivers.With respect to Carlo,Bubbly is most likely

A) an employee.
B) an agent.
C) an independent contractor.
D) a principal.

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Question 32

Multiple Choice

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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 approve the contract.This is

A) an agency by agreement.
B) an agency by estoppel.
C) an agency by ratification.
D) not the creation of an agency relationship.

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Question 33

Multiple Choice

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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

A principal owes an agent a duty of ratification.

An agency relationship cannot exist in the absence of a formal agreement.

In considering the scope of an agent's implied authority,the test is whether the agent reasonably believed that he or she had the authority.

A corporate officer is not an agent for the corporation.

Geoff serves in a representative capacity for Huck.To accomplish the objectives of this relationship,Geoff's authority can be implied

Tire Manufacturing Company employs Uri as an agent.To terminate Uri's authority,Tire Manufacturing must notify

A principal who causes a third person to believe that another person is the principal's agent can be estopped from denying the agency relationship.

An independent contractor's physical conduct is controlled,or subject to control,by his or her employer.

Kady,an agent for Lebron,enters into a contract on Lebron's behalf with Madge that must be in writing to be enforceable under the Statute of Frauds.Kady's authority to enter into this contract is not in writing.Under the equal dignity rule,this contract is

A power of attorney can be given only to an actual attorney.

An agency relationship may not occur by operation of law in a family.

Commercial Development Corporation (CDC) hires Delta Construction Company to work at a site as an independent contractor.Whether CDC will be liable for torts committed at the site by Delta depends on

Before a principal can ratify a contract,the principal must know all of the material facts involved in the deal.

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

Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Kompany.Iggy tells Joy to reveal only that she is buying the firm on behalf of a third party,without telling Kup-a-Koffee's seller who that third party is.Iggy is

Employees who deal with third parties are agents of their employers.

A disclosed principal is not liable to a third party for contracts made by the agent acting outside the scope of his or her authority.