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72 Cards in this Set

  • Front
  • Back
A gratuitous agent has a duty of loyalty and is liable for any harm caused by his careless perfomrance
An agent will not be authorized to act for a principal unless he receives some consideration for the task.
In a partnership, each partner is an agent of the partnership
Diane appoints Edward as her agent to sell goods in markets where the highest price can be obtained. Edward sells the goods in a market that is glutted and obtains a low price, even though he could have obtained a higher price in a nearby market by using more care in obtaining the the available market information. Edward is liable to Diane for breach of the duty of diligence.
An agency contract appointing the agent for a period of more than one year does not have to be in writing
As a general rule, a person may do through an agent whatever business activity he may accomplish personally
Mary employs Tony to purchase for her a suitable site for an office complex. tony owns a suitable site himself and sell it to Mary fo the fair market value without disclosing to her that he is the owner of the land. tony has fulfilled his duties to Mary becuase he sold the property for the fair market value, even if he failed to disclose his ownership of the property.
A minor can act as an agent for an adult.
Edward write to Judy who was in the business of purchasing goods for others, telling her to purchase certain goods and shkp them to hime. Before answering Edwards letter, Judy does as directed and charges the good to Edward. Judy was not authorized to do this because an agency relationship did not yet exist between Edward and Judy.
An agent can never act for two principals
Under the Second Restatement, an agency is not automatically terminated when the principal files a petition in bankruptcy
An agent hired to buy gems for his principal can buy a diamond to give to his wife only if he ask his principal first, otherwise, he has breached his fiduciary duty
A principal owes to any agent the same duties under tort law that the principal owes to all parties.
The maxim "Qui faci per alium, facit per se" accurately describes the relationship between an independent contractor and the one who hired him or her.
A principal may generally revoke the authority of an agent at any time
The principal cannot revoke an agency couple with an interest
Jones, an agent of Rossi, is authorize to sell Rossi's ownership of wheat on the commodities market on Monday. On Monday, however, the market opens with the lowest prices for wheat in two decades. Jones must go ahead and sell Rossi's wheat on Monday.
In some states, the authority of an agent to sell land must be inh writing and signed by the principal.
the distinction between employee and independent contractor is irrelevant
Because the authority given to an agent by a principal is strictly personal, the agent's death terminates the agency
an attorney retained to handle a particular transaction is an independent contractor and also an agent regarding that transaction
If an agent receives a gift from a third person with whom he is dealing on behalf of the principal, he can keep it without notifying the principal.
An agent may be liable to his principal if he improperly delegates his authority
The fiduciary duty of an agent has a bearing upon his ability to act on behalf of a competitor of his principal
Agency relationships are governed primarily by federal statute
The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.
A person who engages an independent contractor may control the method and manner used by the contractor to perform the job.
Electronic agents are not considered agents despite their name
An agency agreement does not have to always be in writing
All employees are agents, but not agents are employees
All independent contractors are agents, but not all agents are independent contractors
A plumer hired to redo the plumbing in a building is an independnet contractor and agent of the owner of the building
Agents and principals have mutual fiduciary duties to one another
The duty of obedience 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
An agent who violates his fiduciary duty loses the right to compensation.
The appointment of an agent by a minor or an incompetent nut under a guardianship and any resulting contracts are not voidable regardless of the agent's contractual capacity
Whether a person is an employee or an independent contractor makes a difference in whether the principal has obligations under certain federal and state statutes
Factors in determining whether a person acting for another is an employee or an independent contractor include the kind of occupation, the skill required, which party supplies the tools, and the method of payment.
According to the restatement, wheter an agency relationship has been created is determined by using a subjective test.
Since the capacity to be a principal depends upon the capacity of the principal to do the act himself, a person cannot appoint an agent to act for him in the case that he subsequently loses mental capacity
A ______ is a formal appointment of an agent.

a. fiduciary
b. revocation
c. power of attorney
d. rescission
C. power of attorney
Trudy would breach the duty to inform if she failed to tell her principal:

a. a debtor of her principal has become insolvent her principal authorized her to sell at $50,000 could be sold for $53,000.
c. a customer of her principal has become insolvent.
D. All of the above
All of the above
the duty of _____ requirs the agent to act in the principal's affairs only as authorized by the principal and to obey all reasonable instructions and directions given by the principal.

a. accounting
b. obedience
c. fiduciary
d. diligence
b. obedience
Contractual duties of a principal to an agent include all but the duty to: the agent for losses suffered while acting legally as directed by the principal.
b. account for financial benefits
c. pay for authorized expenses incurred.
d. compensate the agent as specified in the contract.
b. account for financial benefits
Which of the following will terminate an agency couple with an interest

a. The
b. The bankruptcy of the principal
c. The incapacity of the principal
d. All of the above will terminate such an agency.
e. None of the above will terminate such an agency.
e. None of the above will terminate such an agency
Which of the following may terminate an agency agreement by operation of law?

a. Fulfillment of purpose
b. Mutual agreement of the parties
c. Bankruptcy of the principal
d. Renunciation by the agent
C. Bankruptcy of the pricipal
The electronic signatures in global and national commerce Act:

a.makes electronic records and signatures valid and enforceable across the United States for many types of transactions affecting interstate commerce.
b. excludes all transactions covered under the UCC.
c.was enacted by all the states after being promulgated as a uniform act.
d. defines an “electronic agent” as a true agent.
A. makes electronic records and signaures valid and enforcable across the US for many types of transactions affecting interstate commerce.
Which of the following is not a major duty which the agent owes to his principal

a. Duty to obey instructions
b. Duty to act in good faith and with loyalty
c. Duty to indemnify.
d. Duty to exercise care.
C.Duty to indemnify
Which of the following is not an agent of the business

a. An officer of a corporation
b. An assembly­line worker in a factory
c. A member of a limited liability company
d.A person hired by a sole proprietor to make purchases of business supplies and materials
e. All of the above are agents of the businesses.
e. all of the above
An agent has breached his fiduciary duty to the principal in which of the following situations

a. Where the agent competes with the principal
b. Where the agent makes a secret profit
c.Where the agent uses confidential information obtained in the course of the agency for his own benefit
d. All of the above.
D. All of the above
Which of the following is correct with regard to the capacity of an agent?

a. The incapacity of the agent disqualifies him from making a contract that is binding of his principal.
b._Business associations do not have the capacity to act as agents.
c._If an incompetent person who is not under guardianship appoints an agent, contracts made_by that agent are voidable.
d._Electronic agents, although not persons, are considered agents.
C. If an incompetent person who is not under guardianship appoints an agent, contracts made by that agent are voidable.
Which of the following is correct with regard to a gratuitous agency

a. A gratuitous agent is a paid agent.
b.A gratuitous agent is subject to the same duty of loyalty as other agents.
c. A gratuitous agent has no duty of diligence
d.A gratuitous agent need not be reimbursed for her expenses.
B. A gratuitous agent is subject to the same duty of loyalty as other agents.
Amber, who is an agent for Peter, breaches her fiduciary duty to Peter. Which of the following is correct?

a. Amber is liable to Peter for breach of contract.
b.Amber is liable to Peter in tort for any losses caused by the breach.
c.Amber must make restitution for any profits or prop rty received in breach of this duty.
d. All of the above are correct.
D. All of the above
Steven is a manufacturer's representative for Sellmed Corporation. One day he receives a big screen television as a gift from one of the clients he contacts on behalf of Sellmed.

a. Steven must account to Sellmed for the gift he has received.
b._The bigscreen television belongs to Sellmed rather than to Steven.
c._If Steven keeps the TV without telling Sellmed, he will have breached his fiduciary duty to Sellmed.
d. All of the above are correct
d. All of the above are correct
Jason may validly authorize Nathan to:

a._obtain title to Max’s car by making materially false representations of an existing fact.
b. vote in his place since jason is not feeling well on election day
c. negotiate a contract for the sale of Jason’s boat.
d. All
C. negotiate a contract for the sale of Jason's boat
According to the second restatemtn, in which of the following situations would an agency be terminated by operation of law?

a._An outbreak of war places the principal and agent in the position of alien enemies.
b._The agent, without the principal's knowledge, obtains interests adverse to the principal.
c. The agent gives notice to the principal that she is renounceing the authority given to her
d. Both (a) and (b), but not (c).
d. Both (a) and (b), but not (c).
Which of the following is not a factor used to determine where an agent is an employee or an independent contractor

a. Whether the employee or the employee/independent contractor designates the person and the task to be accomplished
b. Whether the principal is or is not in business
c. Method of payment
d._Whether the work is part of the regular business of the principal
a. Whether the employee or the employee/independent contractor designates the person and the task to be accomplished
Which of the following is noot a breach of an agents duty of obedience?

a. Entering into an unauthorized contract for which his or her principal is liable.
b.Refusing to follow the principal/employer's instruction to misrepresent the quality of a
c. Improperly delegating her authority.
d. Committing a tort for which the principal is liable.
b. refusing to follow the principal/employer's instruction to misrepresent the quality of a competitor's goods to a potential customer.
An agent is not required to keep which of the following information confidential?

a. Unique business methods
b. Customer lists
c._Information that his or her principal is engaged in criminal activity
d. Business plans
c._Information that his or her principal is engaged in criminal activity
A principal has no duty to compensate his or her agent if:

a. the agent breached the duty of obedience
b. the agent breach the duty of loyalty
c. it is a gratuitous agency
d. All the above are correct.
D. All of the above
In circumstances under which a person is held liable as a principal even though no actual agency has been created, there is a(n)

a. agency by estoppel.
b. apparent agency.
c. ostensible agency.
d. All of the above
D. All of above
An agency:

a. is a consensual relationship that the principal and agent may form by contract agreement.
b. must be created with consideration.
c. requires a formal writing, called a power of attorney.
d._which is voidable because of the incapacity of an agent results in only voidable contracts
with third parties
A. is a consensual relationship that the principal and agent may form by contract or agreement.
Milton owns a business delivering coffee and donuts within the downtown area of the city. Smith Co. calls him to deliver a large quantity of his products to their local office. While taking a coffe urn through the Smith Co.'s office, Milton drops it on Lester, scalding him. Who is liable?

a. Smith Co and Milton are liable
b. Milton alone is liable
c. Lester has to absorb the cost himself since he assumed the risk by working at Smith co
d. Smith Co. alone is liable
b. Milton along is liable
Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a videotape recorder from VideoWorld. The transaction between Joe and VideoWorld is:

a. void because Mark is a minor
b. voidable by VideoWorld because Mark is a minor.
c. voidable by Mark because he is a minor
d. not voidable because Joe is not a minor.
C. voidable by Mark because he is a minor.
Carolyn, a cashier a Tops Supermarkets, may cash checks for up to $20 over a purchase amount. A friend needs money for a dress so Carolyn cashes a check for $50 with no purchase. The check bounces.

a. Carolyn is liable because she violated her duty of obedience
b.Carolyn is liable because she breached her duty to inform.
c.Carolyn is not liable since she has apparent authority to take the check.
d.Carolyn is not liable unless she knew her friend did not have the money in the bank.
a. Carolyn is liable because she violated her duty of obedience
When is an agency relationship irrevocable?

a. It is never irrevocable.
b.When the agency is coupled with an interest of the agent in the subject matter
c. When the principal violates his duties to the agent
d. When the agency is gratuitous
b.When the agency is coupled with an interest of the agent in the subject matter
All of the following except which one is a duty of an agent?

a. Account for money received on behalf of the principal
b.Inform the principal of any information relevant to the agency
c. Refrain from competing with the principal
d.Refrain from using any information gained while an agent
d._Refrain from using any information gained while an agent
Robert advances money to John so that John can purchase inventory for his business. In return and for security of the loan, John makes Robert his agent.

a.If John becomes incapacitated, Robert's agency is terminated by operation of law.
b. If John files for bankruptcy, roberts agency uis terminated by operation of law
c.If John dies, Robert's agency is terminated by operation of law.
d. All of the above are correct.
e. Robert's agency is irrevocable.
E. Robert's agency is irrevocable
An agency will terminate on the occurrence of all but which one of the following?

a. The goal of the agency is accomplished
b. The agent decides to quit.
c. The subject matter of the agency is destroyed.
d. The principal leaves the country.
D. The principal leaves the country
Mark hirs Joes real estate agency to sell his estate, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then mark wins the three million dollar lottery. Joe read this in the newspaper and that afternoon makes a contract with sharon to sell the estate. Is the contract valid?

a. No, the agency terminated because of the change in conditions
b. No, the agent has no right to sell without consent.
c.Yes, Mark would have to notify Joe if he wanted to stop the sale.
d. Yes, Joe had apparent authority to sell.
A. No, the agency terminated because of the change in conditions
Carl loans Dan $1,500 for Dans honeymoon. Dan gives Carl his ruby ring as security for the loan and after a year, tells Carl he may as well sell it to recoup the 1500. When Dan;s wife heas of this, she persuades Dan to call Carl and get back the ring. Can Carl sell it anyway?

a. No, because Carl's agency has been revoked
b.No, because an unreasonable amount of time has elapsed
c. Yes, because Carl has apparent authority
d. Yes, because Dan cannot terminate this agency
d. Yes, because Dan cannot terminate this agency
Which of the following would not be considered an agent?

a. A salesman who sell his employer's goods
b. An independent contractor without authourity to act on behalf of ther perwson hring her
c. A factory worker hired to oeprate a machine
d. A buyer who reulary buys merchansie for a store
e. Both (b) and (c)
b. An independent contractor without authourity to act on behalf of ther perwson hring her