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T/F: A gratuitous agent has a duty of loyalty and is liable for any harm caused by his careless performance

true

T/F: An agent will not be authorized to act for a principal unless he recieves some consideration for the task

false

T/F: In a partnership, each partner is an agent of the partnership

true

T/F: An agency contract appointing the agent for a period of more than one year does not have to be in writing

false

T/F: As a general rule, a person may do through an agent whenever business activity he may accomplish personally

true

T/F: A minor can act as an agent for an adult

true

T/F: An agent can never act for two principals

false

T/F: Under the Second Restatement, an agency is not automatically terminated when the principal files a petition in bankruptcy

false

T/F: A principal owes to any agent the same duties under tort law that the principal owes to all parties

true

T/F: The maxim "Qui facit per alium, facit per se" accurately describes the relationship between an independent contractor and the one who hired him or her

false

T/F: A principal may generally revoke the authority of an agent at any time

true

T/F: The principal cannot revoke an agency coupled with an interest

true

T/F: In some states, he authority of an agent to sell land must be in writing and signed by the principal

true

T/F: The distinction between employee and independent contractor is irrelevant

false

T/F: Bc the authority given to an agent by a principal is strictly personal, the agents death terminates the agency

true

T/F: An attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction

true

T/F: If an agent recieves a gift from a third person with whom he is dealing on behalf of the principal, he can keep it without notifying the principal

flase

T/F: An agent may be liable to his principal if he improperly delegates his authority

true

T/F: The fiduciary duty of an agent has a bearing upon his ability to act on behalf of a competitor of his principal

true

T/F: Agency relationships are governed primarily by federal statue,

false

T/F: the principal has a duty to indemnify the agent for losses incurred or suffered while acting as a directed by the principal in a transaction which is not illegal or wrongful

true

T/F: A perosn who engages an independent contractor may control the method and manner used by the contractor to perform the job

false

T/F: "Electronic Agents" are not considered agents despite their name

true

T/F: An agency agreement doesnt have to always be in writing

true

T/F: All employees are agents, but not all agents are employees

true

T/F: All independent contractors are agents, but not all agents are independent contractors

false

T/F: a plumber hired to redo the plumbing in a building is an independent contractor and agent of the owner of the building

false

T/F: Agents and principals have mutual fiduciary duties to one another

false

T/F: the duty of obediance owed by an agent to a principal is not breached and will not result in liability to the principal if the agent refused to do an illegal or unethical act for the principal

true

T/F: an agent who violates his fiduciary duty loses the right to compensation

tru

T/F: An agent who violates his fiduciary duty loses the right to the compensation

true

T/F: he appointment of an agent by a minor or an incompetent not under a guardianship and any resulting contracts are not voidable regardless of the agents contractual capacity

false

T/F: If an agent acting within his actual authority does not tell the third party that he is working in an agency capacity, the principal is not bound

false

T/F: An agent has the power to contractually bind her principal whenever she has actual or apparent authority and acts within her authority

true

T/F: Apparent authority is actual authority

false

T/F: Apparent authority can arise where there is an undisclosed principal as well as where the principal is disclosed.

false

T/F: Ordinarily, an agent may delegate his duties to an equally qualified subagent.

false

T/F: A subagent owes a fiduciary duty to only the principal

false

T/F:An employer may not be held liable if her employee sells liquor to an underage person if this criminal act was unauthorized by the employer

false

T/F: An agent is personally liable for the torts he commits while in the scope of his employment.

true

T/F: Martinez makes a contract with Bowers on behalf of a disclosed principal. If Bowers breaches the contract, ordinarily Martinez has no right of action against Bowers.

true

T/F: Sunset Properties, Inc. hires William to manage its 82-unit apartment complex. Nothing is said as to expenses. William purchases fuel to heat the apartments and arranges for a repairman to do ordinary maintenance. William will be personally liable for these expenses, because he has no authority to incur them.

false

T/F: A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

false

T/F: The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

true

T/F: Even though an agent exceeds his express authority, the principal may still be bound.

true

T/F: Unless otherwise agreed, an agent making a contract for a partially disclosed principal is a party to the contract

true

T/F:An agent for a partially disclosed principal is liable on the contract to the third party no matter whether the particular transaction is authorized or not

true

T/F: Upon the termination of an agency, the agent's actual authority ceases. However, his apparent authority may continue until actual notice of the termination is given to third parties

true

T/F: In general, an undisclosed principal and the third party to a contract are contractually bound if the agent acts within the scope of his actual authority in making the contract

true

T/F: Julie writes a letter to Mitchell authorizing him to sell her boat and sends a copy of the letter to Jared, a prospective buyer. The next day, Julie writes Mitchell a letter revoking his authority to sell the boat, but she does not send a copy of the second letter to Jared. Although Mitchell has no actual authority to sell the boat now, he continues to have apparent authority with respect to Jared.

true

T/F: If an agent exceeds his actual and apparent authority, the principal is not bound, which makes the agent a party to the contract

false

T/F: Constructive notice of termination of an agency may not occur by mere publication in a newspaper.

false

T/F: Ann, in the presence of Betty, tells Thomas that Ann is Betty's agent. In reality, Ann had no authority. Betty hears the statement, but she says nothing. In reliance, Thomas ships goods to Betty on Ann's order. Betty is liable even though no actual authority existed.

true

T/F: Ratification and adoption of contracts have the same effect; they are both retroactive and both release the purported agent.

false

T/F: The contract liability of the principal may depend upon whether the principal is disclosed, partially disclosed, or undisclosed

true

T/F: Apparent authority arises out of words or conduct of a disclosed or partially disclosed principal manifested to third persons

true

T/F: A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract

true

T/F: An employer may have criminal liability for the acts of his employee.

true

T/F: An employer can be liable for an agent's negligence, but he will never be liable for his intentional torts.

false

T/F: The Second and Third Restatements are the same regarding when an agent's apparent authority ceases.

false

T/F: There can be apparent authority where a third party knows the agent has no actual authority.

false

T/F: The Second Restatement provides that the death of a principal terminates all authority of an agent, including apparent authority, even though no notice is given to third parties.

true

T/F: Under the Uniform Durable Power of Attorney Act, if a principal who has executed a written durable power of attorney becomes incapacitated, the actual authority of an agent survives

true

T/F: Constructive notice constitutes actual notice

false

T/F: A person who purports to act as agent for a principal whom both the agent and the third party know to be wholly incompetent is personally liable on a contract entered into with a third person on behalf of such a principal

true

T/F: An agent who makes a contract for a disclosed principal whose contracts are voidable for lack of contractual capacity is liable to the third party in most cases

false

T/F: The principal may ratify either the entire contract or certain parts of it.

false

T/F: An agent who makes a contract with a third person on behalf of a disclosed principal usually is not a party to the contract.

true

T/F: Mary tells her accountant, "I must have this year's audit completed by March 1." The accountant agrees to complete the audit by March 1. Under general contract law, if the audit is not completed by March 1, Mary does not have to pay the accountant for the audit.

true

T/F: Under the majority view and the Restatement test for determining liability, negligence of an accountant in conducting an audit may result in damage awards to potential investors

false

t/f: Criminal sanctions for accountants are limited to punitive fines

false

t/f: An accountant must disclose the contents of his working papers under a court order

true

t/f: An accountant-client privilege is statutorily recognized in some states and would generally permit the accountant to refuse to disclose confidential information gleaned from his client

true

t/f: An accountant who commits fraud may be held liable for compensatory, but not punitive, damages.

false

t/f: Under the 1934 Act, reliance is required to hold the accountant liable for a material misrepresentation.

true

t/f: An accountant's liability under the federal securities laws is basically the same as the liability at common law.

false

t/f: The common law recognizes an accountant-client privilege

false

t/f: in most statutes granting an accountant-client privilege, it belongs to the client and not to the accountant.

true

t/f: Most courts allow an accountant to raise the defense of the plaintiff's contributory or comparative negligence.

false

t/f: A tax client wishing to defer income he earned this year asks his accountant to misstate information on his tax return. If the accountant does so, she may be subject to fines and up to five years in prison.

false

t/f: Historically, privity of contract was not a requirement for a cause of action based on an accountant's liability for negligence.

false

t/f: An implied agreement in the contractual relationship is the agreement by the accountant to act in a competent and professional manner

true

t/f: For negligence cases, the Restatement has adopted the requirement of privity as set forth in the landmark opinion of Judge Carodzo in Ultramares Corp. v. Touche

false

t/f: Foreseen plaintiffs under the Restatement view of tort liability for an accountant include potential investors and the general public

false

t/f: The client is generally held to be the owner of the working papers the accountant uses in performing an audit

false

t/f: An accountant who contractually promises to conduct an audit to detect possible embezzlement is under a contractual obligation to provide for the client an expanded audit beyond Generally Accepted Auditing Standards

true

t/f: An accountant has a duty to comply with court orders, client requests, and Generally Accepted Auditing Standards with regards to disclosure of a client's confidential information

rue

t/f: Scienter is not a requirement for an accountant to be civilly liable under Rule 10b-5

false

t/f: An accountant's legal liability is imposed both by the common law at the state level and by securities laws at the federal level

true

t/f: Section 11 of the 1933 Securities Act imposes liability upon an accountant for negligence in the conduct of an audit

true

t/f: An accountant who willfully violates Section 11 of the 1933 Securities Act will be subject to criminal liability

true

t/f: Accountants authorized under federal law to practice before the IRS have the privilege of confidentiality for tax advice given to their client-taxpayers with respect to Internal Revenue Code matters

true

t/f: The Ultramares case involved the liability of an accountant under the Securities Act of 1933.

false

t/f: In recent years, more and more courts have followed the Ultramares doctrine in deciding cases.

false

t/f: An accountant who substantially performs his contractual duties under a contract with a client is entitled to compensation at the agreed upon rate less any damages he has caused the client

true

t/f: An accountant has no liability to third parties other than the client

false

t/f: Matt agrees to perform an audit within 30 days, knowing that time is of the essence. When the 30 days are up, Matt has only performed 60% of the audit. Matt has materially breached his contract.

true

t/f: An accountant who acts in a reasonably competent and professional manner is an insurer of the accuracy of her report.

false

t/f: A corporation may not be a partner in a partnership

false

t/f: Under the common law, a partnership is generally considered to be a legal entity rather than an aggregate of individuals

false

t/f: Partners may elect to have the partnership not be a separate taxable entity, so that only the partners are taxed.

true

t/f: A general partnership may be formed for a charitable purpose

false

t/f: Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in order to be enforceable in the courts

true

t/f: What is considered "partnership property" is determined primarily by the partners' intentions.

true

t/f: Sharing of gross returns establishes a partnership

false

t/f: In some corporations, only the shareholders are taxed; in others, both the corporation as an entity is taxed and the shareholders are taxed as well.

true

t/f: A partner cannot assign his interest in the partnership without dissolving the partnership.

false

t/f: Under the RUPA, no person may become a member of a partnership without the consent of all the partners

true

t/f: A person who receives a share of the profits of a business is presumed to be a partner

true

t/f: A partnership name may be the name of the partners or any one of them

true

t/f: Under the RUPA, a partnership agreement may be written or oral, but not implied

false

t/f: A business trust, also called a Massachusetts trust, was devised to avoid burdens of corporate regulation, but it is no longer in use today

false

t/f: A limited liability company (LLC) provides limited liability to all of its owners and permits all of its owners to participate in management.

true

t/f: Alice and Brad enter into a partnership, which becomes insolvent, as does Brad. Alice is fully liable for the debts of the partnership.

true

t/f: Corporations today outnumber unincorporated business associations

false

t/f: All states have authorized the formation of limited liability companies

true

t/f: All 50 states have adopted the Revised Uniform Partnership Act.

false

t/f: in a business trust, the trustees are generally not personally liable for the debts of the business.

false

t/f: Because the statute of frauds does not apply expressly to a contract for the formation of a partnership, usually no writing is required to create the relationship.

true

t/f: A joint venture is necessarily of short duration

false

t/f: A sole proprietorship is formed without any formality, is not a separate taxable entity, is dissolved upon death of the owner, and has unlimited liability for the owner

true

t/f: The newly formed Bright Partnership cannot commence business until it meets its state's required minimum amount of capitalization.

false

t/f: The proportion in which partners bear losses depends upon their relative capital contributions.

false

t/f: In all types of business entities, the owners can fully share in the management and control of the business.

false

t/f: Income from some types of business entities is taxed twice.

true

t/f: General partnerships are frequently used in finance, accounting, real estate, and law

true

t/f: If no specific agreement exists, the partners bear losses in the same proportion in which they share profits.

true

t/f: The choice of the most appropriate form of business enterprise cannot be determined in a general way, but depends on the particular circumstances of the owners

true

t/f: The law of partnership differs greatly from the law of agency

false

t/f: Under the UPA, any suit in contract against the partners must name all of them as defendants.

true

t/f: Under the RUPA, during winding up, the partnership must apply its assets first to discharge the obligations of partners who are creditors on parity with other creditors, subject to any other laws.

true

t/f: Maria is admitted as a partner to the existing Greene Ridge Partnership in June of 2007. Unless she signs an agreement to the contrary, she will be personally liable on all partnership obligations, including one incurred in December of 2006.

false

t/f: A partner's receipt of notification of a fact relating to the partnership is not effective against the other partners until the receiving partner enters the relevant fact on the minutes at the next business meeting of the partnership

false

t/f: Under the RUPA, dissociation of a partner results in dissolution only in limited circumstances.

true

t/f: Under the UPA, if a partner makes a loan to the partnership, he will be in the same position as other creditors who are not partners in requesting repayment upon dissolution

false

t/f: A partner's liability for partnership debts is limited to his capital contribution

false

t/f: The RUPA abolishes the marshaling of assets doctrine and the dual priority rule

true

t/f: Under the RUPA, if a partner is dissociated from a partnership without resulting in dissolution, the business may choose whether to purchase the dissociated partner's interest in the partnership.

false

t/f: Under the RUPA, a dissociated partner is not liable for a partnership obligation incurred more than two years after dissociation

true

t/f: Respondeat superior has no application to situations where a partner commits a tort, because only the partner, and not the partnership, is liable.

false

t/f: The UPA codified all of the common law causes of dissolution of a partnership

false

t/f: Under the RUPA, if White withdraws from the partnership of White, Green, and Grey in violation of the partnership agreement, White is liable to the partnership for damages.

true

t/f: The process of liquidation of a partnership is also known as "winding up."

true

t/f: Under the UPA, in order to avoid liability, only constructive notice of a dissolution is required to be given to third parties who had no knowledge of the partnership before its dissolution

false

t/f: Upon dissolution of a partnership, apparent authority terminates although actual authority generally continues

false

t/f: Under the RUPA, dissolution is the equivalent of termination of a partnership.

false

t/f: Where the UPA is controlling, Lynette, expelled from the YLC Partnership pursuant to a provision in the partnership agreement, can now force liquidation of the partnership

false

t/f: Dale falsely tells Glenna that he is a partner in Huntsman Appraisers. Glenna casually repeats this information to Kash, who sells office equipment on credit to Huntsman in reliance on the statement. Kash cannot hold Dale liable because he was not justified in relying on the representation made privately by Dale to Glenna, which Dale did not consent to have repeated

true

t/f: The doctrine of marshaling of assets is an equitable doctrine

true

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