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201 terms

bul exam 2

STUDY
PLAY
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
t/f: If a partnership is a debtor under the Bankruptcy Code and partnership property is insufficient to pay all the claims against the partnership, the trustee in bankruptcy must first seek recovery of the deficiency from the estates of the bankrupt partners, and then may seek recovery from general partners who are not bankrupt.
false
t/f: Under the RUPA, a partnership must indemnify a dissociated partner whose interest is being purchased against all partnership liabilities incurred before, but not after, the dissociation
false
t/f: Upon dissolution, the partnership must be liquidated
false
t/f: The best and most reliable tool for preserving a partnership business after dissolution is through a continuation agreement
true
t/f: A partner who does not have actual authority to order a fax machine for the partnership office probably has apparent authority to do so
true
t/f: The liability of partners for a tort or breach of trust committed by any partner is unlimited, personal liability.
true
t/f: In a partnership of A, B, and C, A commits fraud which creates a $9,000 liability to the partnership. If the three partners share profits and losses equally, A's liability to the partnership for his fraudulent act is $3,000
false
t/f: A person, who represents himself to third persons as being a partner, when in fact he is not, may have the liability of a partner.
true
t/f: If the partnership is bound by a contract, then each general partner has unlimited personal liability for that obligation
true
t/f: Under the UPA, after all the partnership's creditors have been paid, each partner is entitled to repayment of his capital contribution upon termination of the firm.
true
t/f: A retiring partner cannot be discharged from existing liabilities of the partnership except by payment.
false
t/f: Creation of a limited partnership does not require more formalities than formation of a general partnership
false
t/f: Under the RULPA, a limited partnership may not use a name that is deceptively similar to that of any corporation or other limited partnership
true
t/f: The RULPA requires that the limited partnership certificate list the capital contribution of each general and limited partner
false
t/f: Foreign limited partnerships do not have to operate in another country.
true
t/f: A limited partner will not lose his limited status because of voting on an amendment to the partnership agreement allowing a new business venture
true
t/f: Unanimous written consent of all partners is necessary to add new limited partners to a limited partnership.
true
t/f: A limited partner has limited access to the books and records of the partnership
false
t/f: A limited partner owes a duty of care to the partnership similar to that of a general partner.
false
t/f: Under all LLC statutes, a unanimous vote of the members must be obtained to approve a merger.
false
t/f: Statutes or the common law impose duties of good faith and fair dealing on all members of an LLC whether the LLC is manager managed or member managed
false
t/f: Upon dissolution, unlike a general partner, a limited partner can get his capital back before general creditors are paid
false
t/f: Limited partnerships are the same as limited liability partnerships
false
t/f: The 2001 revision of the RULPA has been widely adopted
false
t/f: A limited partnership is a partnership formed by two or more persons under the laws of a state and having one or more general partners and one or more limited partners
true
t/f: Like general partnerships, limited partnerships are statutory creations that did not exist at common law.
false
t/f: A member of a limited liability company has a property interest in the property owned by the LLC.
false
t/f: A "person" for purposes of a limited partnership can be a corporation
true
t/f: Under the 1985 Act, the limited partner need not be named in the limited partnership certificate.
true
t/f: Adrianne may form a limited liability company by filing articles of organization in a designated state office, even if she is the only member of the company
true
t/f: A general partner in a limited partnership may also be a limited partner and, as such, shares in profits, losses, and distributions both as a general partner and as a limited partner
true
The causes of dissolution and the priorities in the distribution of assets for a limited partnership are not the same as those of a general partnership
true
t/f: Joe is a limited partner in a limited partnership. Joe does not have the right to dissolve the partnership except by decree of a court
true
t/f: If the partnership agreement does not specify when a limited partner may withdraw or specify a definite time for the limited partnership's dissolution, a limited partner may withdraw upon giving at least one month's written notice to each general partner
false
t/f:If the partnership agreement does not specify when a limited partner may withdraw or specify a definite time for the limited partnership's dissolution, a limited partner may withdraw upon giving at least one month's written notice to each general partner
false
t/f: a limited partner may vote on the sale of all of the assets of the limited partnership or a change in the nature of the business without being deemed to have taken part in control of the business.
true
t/f: After the formation of a limited partnership, the admission of additional general partners can only be accomplished with the written consent of all partners
false
t/f: A general partner, but not a limited partner, may be either a secured or unsecured creditor of the partnership with the same rights as a person who is not a partner
false
t/f: Unless otherwise provided in the LLC's operating agreement, a member may assign his financial interest in the LLC without dissolving the LLC
true
t/f: The RULPA recognizes the right of a limited partner to bring an action on the behalf of a limited partnership to recover a judgment in its favor if the general partners having authority to do so have refused to bring the action
true
t/f: One of the most appealing features of a limited partnership is the limited personal liability it offers to limited partners
true
t/f: It remains unclear under the law whether a limited partner has a fiduciary duty to his general partners or to the limited partnership
true
t/f: the certificate of limited partnership need not be amended if a new general partner is admitted.
false
t/f: An oral promise by a limited partner to contribute to the limited partnership is enforceable.
false
t/f: A limited partnership agreement may not provide that limited partners have the right to vote on matters as a separate class from the general partners
false
t/f: A creditor of a limited partner may obtain a charging order against the limited partner's interest in the partnership, thereby becoming an assignee of the partnership interest
true
t/f: A limited liability company is a form of unincorporated business association that blends the advantages of both general and limited partnerships, because all its members may have limited liability and all may participate in management and control without loss of limited liability
true
t/f: All states except one have adopted either the 1976 or 1985 RULPA
true
t/f: False statements in a certificate or amendment that cause loss to third parties that rely on the statement may result in liability for the general partners
true
t/f: A partner may not receive a distribution from a limited partnership unless the remaining assets are deemed sufficient to pay partnership liabilities other than liabilities to partners on account of their partnership interests
true
t/f: RULPA requires a lesser duty of care by a general partner to a general partnership than that owed by a general partner to a limited partnership
false
t/f: In states where limited liability limited partnerships (LLLPs) are available, a limited partnership may register as an LLLP without having to form a new organization
true