Reg- Agency

Front 1

Which of the following is not an essential element of an agency relationship?

Back 1

It must be created by contract.

Front 2

Forming an agency relationship requires that

Back 2

Both the principal and agent consent to the agency.

Front 3

Pell is the principal and Astor is the agent in an agency coupled with an interest. In the absence of a contractual provision relating to the duration of the agency, who has the right to terminate the agency before the interest has expired?

Back 3

Pell Astor

B. No Yes

Front 4

An agency coupled with an interest will be created any time the agent has either _______

Back 4

a property interest or a security interest in the subject matter of the agency.

Front 5

An agency coupled with an interest will be created by a written agreement which provides that a(n)

Back 5

Borrower shall pledge securities to a lender which authorizes the lender to sell the securities and apply the proceeds to the loan in the event of default.

Front 6

Anker wishes to give Mix power of attorney. In general, the power of attorney ______

Back 6

May limit Mix’s authority to specific transactions.

Front 7

Steel has been engaged by Lux to act as the agent for Lux, an undisclosed principal. As a result of this relationship

Back 7

Steel has the same implied powers as an agent engaged by a disclosed principal

Front 8

If an employee commits a tort injuring a third party while acting within the scope of his employment, which of the following is correct?

Back 8

The third party may recover the damages from either the employer or the employee or both

Front 9

Ace engages Butler to manage Ace's retail business. Butler has the implied authority to do all of the following except

Back 9

Sell Ace’s business fixtures.

Front 10

Which of the following is not a type of authority of an agent that a third party can expect to encounter?

Back 10

Expert

Front 11

Which of the following statements concerning agency law is true?

Back 11

A. The agent owes a fiduciary duty to the principal.
C. The principal does not owe his/her agent fiduciary duties.
D. The agent does not owe third parties with which the principal asks the agent to deal fiduciary duties.

Front 12

Ritz hired West for 6 months as an assistant sales manager at $4,000 a month plus 3% of sales. Which of the following is correct?

Back 12

West must disclose any interests he has which are adverse to Ritz in matters concerning Ritz’s business.

Front 13

Which of the following is(are) available to a principal when an agent fraudulently breaches a fiduciary duty?

Back 13

Termination of the agency Constructive trust
A. Yes Yes

Front 14

When the principal is undisclosed in an agency relationship, the agent generally has the same authority __________

Back 14

as if the principal were disclosed. The main difference is in the liability of the agent to third parties.

Front 15

Jim, an undisclosed principal, authorized Rick to act as his agent in securing a contract for the purchase of some plain white paper. Rick, without informing Sam that he was acting on behalf of a principal, entered into a contract with Sam to purchase the paper. If Jim repudiates the contract with Sam, which of the following is correct?

Back 15

Upon learning that Jim is the principal, Sam may elect to hold either Jim or Rick liable on the contract.

Front 16

Which of the following principals may normally ratify an unauthorized contract made by an agent?
I. Fully disclosed principal.
II. Partially disclosed principal.
III. Undisclosed principal.

Back 16

B. I and II only.

Front 17

Brian purchased an automobile from Robinson Auto Sales under a written contract by which Robinson obtained a security interest to secure payment of the purchase price. Robinson reserved the right to repossess the automobile if Brian failed to make any of the required ten payments. Ambrose, an employee of Robinson, was instructed to repossess the automobile on the ground that Brian had defaulted in making the third payment. Ambrose took possession of the automobile and delivered it to Robinson. It was then discovered that Brian was not in default. The below are correct.

Back 17

A. Brian has the right to regain possession of the automobile and to collect damages.
B. Brian may sue and collect from either Robinson or Ambrose.
C. If Ambrose must pay in damages, he will be entitled to indemnification from Robinson.

Front 18

Ozgood is a principal and Flood is his agent. Ozgood is totally dissatisfied with the agency relationship and wishes to terminate it. In which of the following situations does Ozgood not have the power to terminate the relationship?

Back 18

Flood is an agent coupled with an interest.

Front 19

Dixon Sales, Inc. dismissed Crow as its general sales agent. Dixon notified all of Crow's known customers by letter. Hale Stores, a retail outlet located outside of Crow's previously assigned sales territory, had never dealt with Crow. However, Hale knew of Crow as a result of various business contacts. After his dismissal, Crow sold Hale goods, to be delivered by Dixon, and received from Hale a cash deposit for 20% of the purchase price. It was not unusual for an agent in Crow's previous position to receive cash deposits. In an action by Hale against Dixon on the sales contract, Hale will

Back 19

Win, because Dixon’s notice was inadequate to terminate Crow’s apparent authority.

Front 20

Harris is a purchasing agent for Elkin, a sole proprietor. Harris has the express authority to place purchase orders with Elkin's suppliers. Harris typically conducts business through the mail and has very little contact with Elkin. Elkin was incapacitated by a stroke and was declared incompetent in a judicial proceeding. Subsequently, Harris placed an order with Ajax, Inc. on behalf of Elkin. Neither Ajax nor Harris were aware of Elkin's incapacity. With regard to the contract with Ajax, Elkin (or Elkin's legal representative) will

Back 20

Not be liable because Harris was without authority to enter into the contract.

Front 21

Which of the following acts, if committed by an agent, will cause a principal to be liable to a third party?

Back 21

An employee's failure to notify the employer of a dangerous condition that results in injury to a third party.

Front 22

Part agreed to act as Young’s agent to sell Young’s land. Part was instructed to disclose that Part was acting as an agent but not to disclose Young’s identity. Part con¬tracted with Rice for Rice to purchase the land. After Rice discovered Young’s identity, Young refused to fulfill the contract. Whom does Rice have a cause of action against?

Back 22

Part Young
A. Yes Yes

Front 23

Which of the following is a prerequisite for the creation of an agency relationship?

Back 23

The principal must have capacity.