One of the most common, important, and pervasive legal relationships is that of:
Agency is defined as:
a. the relationship of a child to its parents in terms of duty and obedience.
b. the fiduciary relationship reflecting one party's agreement to act on behalf of another party and be subject to her control, with the second party's consent.
c. a relationship in which one who works for, and receives payment from, an employer, but whose working conditions and methods are not controlled by the employer.
d. a relationship involving a skilled person who controls the manner and method of his work.
A fiduciary relationship is one that:
a. involves a high degree trust and confidence.
b. arises only between family members.
c. typically exists between employees in government agencies.
d. allows the parties to legally avoid their obligations to one another.
The general rule with regard to employees who deal with third parties is that, with respect to their employers:
a. they are deemed to be independent contractors.
b. they are not deemed to be agents.
c. they are deemed to be undisclosed principals.
d. they are deemed to be agents.
When determining whether a worker is an employee or an independent contractor, a key element to consider is:
a. the detrimental reliance of the worker.
b. whether the hours worked were during the day or at night.
c. the degree to which the party is computer literate.
d. the extent to which the employer controls the actions of the worker.
Suppose that Kate works at home making unique children's clothes. Larry buys Kate's clothes to sell in his store called "The Wonder Years." What is Kate's legal relationship to Larry?
a. She is probably an employee.
b. She is probably a principal.
c. She is probably an independent contractor.
d. She is probably an agent by operation of law
If Joe, who owns "Joe's Construction and Renovation Company," agrees to renovate Mrs. Simha's bathroom, how would the Internal Revenue Service be likely to classify Joe?
a. As an independent contractor.
b. As a disclosed principal.
c. As an employee.
d. As a partially disclosed principal.
Which of the following is not a way for an agency relation to arise?
a. By rescission.
b. By operation of law.
c. By agreement.
d. By estoppel.
a. the appearance of agency exists when, in fact, none does exist.
b. the fiduciary obligations owed by an agent to a principal.
c. the act of approving or affirming a contract made by someone who was not an agent or by an agent who was not authorized to form the contract.
d. the act of rejecting an obligation of an agent who acted outside the scope of her authority.
If James goes out shopping and, using his wife Maria's credit card, he buys $221.00 worth of groceries, is Maria liable for the purchase?
a. Yes, based on the doctrine of respondeat superior.
b. Yes, based on an agency by operation of law.
c. Yes, based on the duty of performance.
d. No, based on the James's lack of a power of attorney.
Which of the following is not a duty of an agent?
Suppose that Misha, who is Darlene's agent, takes money that Darlene gives him to purchase a new commercial oven and deposits the money into his personal checking account. Misha then accidentally spends some of Darlene's money. In this situation:
a. Misha violated his duty of loyalty.
b. Misha violated his duty of payment.
c. Misha violated his duty of accounting.
d. Misha violated his duty of cooperation.
One of the main duties a principal owes to an agent is:
a. the duty of cooperation.
b. the duty of accounting.
c. the duty of ratification.
d. the duty of loyalty.
An agent's authority to act for a principal:
a. may be actual or apparent.
b. must always be in writing.
c. can be express only.
d. is voidable at the option of a third party who relies on an agent's promises.
Under the equal dignity rule:
a. contracts are voidable by agents.
b. if a contract must be in writing to be executed, an agent's authority must also be in writing.
c. if a contract between a principal and an agent lasts for longer than one year, it must be in writing.
d. the power of state legislatures to create agencies is equal to that of Congress.
An agent's implied authority may be conferred:
a. by custom.
b. by legislative grant.
c. by the local police.
d. by administrative regulation.
When a principal causes a third party to reasonably believe an agent has authority to act on the principal's behalf, even if the agent does not have such authority, this is known as:
a. anticipatory breach.
b. repudiation by act.
c. operation of law.
d. apparent authority.
With respect to a principal's ratification of an agent's unauthorized act, which of the following is not necessary?
a. The principal must know all the material facts about the transaction.
b. The third party must withdraw before the principal affirms.
c. The agent must act on behalf of an identified principal.
d. The principal must affirm the agent's act in entirety.
A principal whose identity is known to a third party at the time a contract is made is:
a. a partially dislocated principal.
b. a confirmed principal.
c. a disclosed principal.
d. a major principal.
If Letisha buys a piece of pottery from Woodward for her principal, Jemal, and if Woodward knows that Letisha is buying the pottery on behalf of someone other than herself, but does not know who, what is Jemal?
a. An independent contractor.
b. An agent.
c. An undisclosed principal.
d. A partially disclosed principal.
If Letisha has no authority to buy the pottery from Woodward, but does so anyway, what is Jemal's liability?
a. He is liable under the doctrine of apparent authority.
b. He is not liable.
c. He is liable only if Woodward knew Letisha was not an agent.
d. He is fully liable under the doctrine of intelligent agents.
Under the legal doctrine of respondeat superior:
a. the agent is responsible for the principal's negligence.
b. the principal is responsible for the agent's torts, as long as they are committed within the scope of employment.
c. the principal is responsible for all torts committed by the agent.
d. the principal has a superior duty of caring for the agent.
The general rule concerning a principal's liability for torts committed by an agent is that a principal is:
a. never liable.
b. always liable.
c. liable when the agent's tort is committed within the course and scope of employment.
d. liable when the agent's tort is committed during a "frolic of his own."
Which of the following does NOT terminate an agency?
a. The purpose is achieved.
b. Lapse of time.
c. The principal calls for an accounting.
d. Operation of the law.