Question 1

Barnett was orally hired by Paula to locate desirable real estate that she could use for rental property.She stated she wanted to find a four-plex that could be purchased for under $200,000 that could be rented for at least $1,000 per month per unit (which equates to $4,000 rental per month for the property).Barnett located a four-plex that could be purchased for $160,000 and was renting for $1,200 per unit.It was such a good deal that he purchased it for himself.About two months later he found a second property that was listed for $199,000 and rented for $1,000 per unit.Paula purchased the property.Afterwards,she learned that Barnett had bought the $160,000 four-plex for himself without telling her about it.Paula believes that Barnett has acted improperly.Barnett claims that he did what she asked -- he found a property for under $200,000 that rented for $1,000 per unit.He also claims that since their agreement was oral,he has a legal defense if she pursues the matter in court.Does Paula have any legal recourse against Barnett? Explain.

Accepted Answer

Yes.Barnett violated his fiduciary duty ...

Question 2

Generally,either party to an agency relationship has the power to terminate it at any time.

Accepted Answer

A) True 
 B)False

Question 3

Alex worked for years for MegaCorp.During his employment with MegaCorp,he learned a great deal of confidential information and knew that if this information got into the hands of competitors or the general public,MegaCorp could suffer great business losses.Alex claims that he was wrongfully fired by MegaCorp and accordingly he believes he has no obligation to MegaCorp to keep any information he acquired with them as confidential.MegaCorp claims that Alex is under a continuing duty to keep confidential information secret,even though he is no longer with the company.Who is right? Why?

Accepted Answer

MegaCorp.Regardless of why Alex no longe...

Question 4

Jim agreed to show Donna's car to a potential buyer.Donna was not able to be home since she had to attend a meeting.After showing the car,Jim left the keys in it and the car was stolen.Which statement is correct?

Accepted Answer

A)   Since Jim is a gratuitous agent, he will only be liable for the loss of the car if his conduct constitutes gross negligence.
B)   Since Jim is a gratuitous agent, he will be liable for the loss of the car if his conduct constitutes ordinary negligence.
C)   Since Jim is a gratuitous agent, he has no liability for the car.
D)   Since Jim is a gratuitous agent, he is strictly liable for the loss of the car.

Question 5

John hired Tim to sell his house.Which statement is correct?

Accepted Answer

A)   John is Tim's principal.
B)   Tim, but not John, can terminate the agency.
C)   This illustrates a power coupled with an interest.
D)   All the above are correct.

Question 6

Linda borrowed $2,500 from Tonya.They agreed that Tonya could take a grouping of Linda's antiques as collateral.If Linda could not pay,then Tonya could sell the antiques to recover her money.When Linda could not pay off the loan,Tonya sold the antiques and paid Linda the proceeds after deducting the balance of the loan.Which of the following statements is correct?

Accepted Answer

A)   This is an irrevocable agency relationship.
B)   This is a power coupled with an interest.
C)   Linda has neither the power nor the right to terminate the relationship.
D)   All the above are correct. D

Question 7

Mohammad was an employee in the new product development department of Estay Inc.Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months.Estay took great care to keep information concerning the new product a secret.Ceries,Inc.,a competitor of Estay,persuaded Mohammad to leave Estay to direct Ceries' marketing department.Which statement is correct?

Accepted Answer

A)   Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development.
B)   Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated.
C)   Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule.
D)   Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency.

Question 8

The bankruptcy of an agent automatically terminates an agency relationship.

Accepted Answer

A) True 
 B)False

Question 9

Circus Pizza contracted with Art to run its birthday parties.Art's responsibilities included supervising the children and organizing the games.Circus did not investigate Art's background,which included a history of assaulting children.Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party.Circus Pizza:

Accepted Answer

A)   cannot be liable for the damages because Art committed an unforeseeable intentional tort.
B)   cannot be held liable for the damages because Art's conduct was not in the scope of employment.
C)   may be held liable on the basis of negligent hiring.
D)   may be held liable only if Circus actually knew of Art's background.

Question 10

The equal dignities rule relative to agency law applies to an agent:

Accepted Answer

A)   hired to contract for a booth at a trade show scheduled to occur in two years.
B)   selling real estate for the principal.
C)   authorized to enter into a two-year lease for her principal.
D)   All the above.

Question 11

Grant is a delivery person for Watkins Furniture.One day,after delivering a chair to Nadine's house,he stopped at a fast food restaurant to get a sandwich at the drive-through window.As he was leaving the parking lot,he accidentally hit the rear of Blanche's car.Discuss the possible liability of Watkins for Grant's accident.Would there be any difference in the potential liability of Watkins if Grant had the accident after driving 30 miles away to visit a friend?

Accepted Answer

The major issue here is abandonment.Watk...

Question 12

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15- year-old,to operate an industrial machine.Hiring the 15-year-old violates the child labor laws.Tom:

Accepted Answer

A)   should hire Elton. Tom has a duty to obey Esday's instructions.
B)   should hire Elton. Tom has a duty of care to ensure that the government does not discover that Elton is 15 years old.
C)   should not hire Elton. Tom has a duty of care and he would not be caring for Elton.
D)   should not hire Elton. Tom has a duty to obey Esday's instructions only if they are legal and ethical.

Question 13

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Accepted Answer

A) True 
 B)False

Question 14

When a principal is partially disclosed:

Accepted Answer

A)   the agent and principal will be jointly and severally liable on the contract.
B)   the agent and principal will be only jointly liable on the contract.
C)   only the principal can be liable.
D)   only the agent is liable.

Question 15

Cameron,editor of the local newspaper,assigned to Jim the writing of a story about pollution of a nearby stream.Although Jim used reasonable care in gathering and checking his information,unknown to Jim,the story contained a defamatory statement about Maureen.Maureen reads the story and sues Jim for libel.Cameron,who read and published the story:

Accepted Answer

A)   must indemnify Jim for Maureen's claim.
B)   need not indemnify Jim for Maureen's claim because Jim should have checked his facts more carefully.
C)   need not indemnify Jim for Maureen's claim because Jim breached his duty to obey instructions.
D)   can recover damages from Jim for any injury to the newspaper resulting from Jim's story. A

Question 16

Mrs.O'Leary hired Jenna to sell her house in Michigan.She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate,acting as a prudent person." On May 30,Jenna finalized a deal with Brandon for the purchase of the house.Brandon and Jenna signed the real estate contract that day.Jenna learned the next day that Mrs.O'Leary had died May 29.

Accepted Answer

A)   The contract is void since the agency terminated May 29.
B)   The contract is valid since the agency's purpose was achieved before Jenna was notified of Mrs. O'Leary's death.
C)   The contract is voidable at the option of Mrs. O'Leary's estate.
D)   The contract is voidable at the option of Brandon.

Question 17

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not required of an agency relationship?

Accepted Answer

A)   Consideration.
B)   Fiduciary relationship.
C)   Consent of the parties to act as agent or principal.
D)   Control of principal over agent's conduct. A

Question 19

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Accepted Answer

In determining if agents are employees o...

Question 20

Which of the following persons is an agent?

Accepted Answer

A)   Diane, a shoe salesperson for a retail store.
B)   Tim, a real estate broker for a large real estate company.
C)   Craig, a telephone marketing employee.
D)   All the above.

Exam 28: Agency Law

Correct Answer
verified
Yes.Barnett violated his fiduciary duty ...
View Answer

Generally,either party to an agency relationship has the power to terminate it at any time.

Correct Answer
verified

Correct Answer
verified
MegaCorp.Regardless of why Alex no longe...
View Answer

Jim agreed to show Donna's car to a potential buyer.Donna was not able to be home since she had to attend a meeting.After showing the car,Jim left the keys in it and the car was stolen.Which statement is correct?

Correct Answer
verified

John hired Tim to sell his house.Which statement is correct?

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

The bankruptcy of an agent automatically terminates an agency relationship.

Correct Answer
verified

Correct Answer
verified

The equal dignities rule relative to agency law applies to an agent:

Correct Answer
verified

Correct Answer
verified
The major issue here is abandonment.Watk...
View Answer

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15- year-old,to operate an industrial machine.Hiring the 15-year-old violates the child labor laws.Tom:

Correct Answer
verified

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Correct Answer
verified

When a principal is partially disclosed:

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

Correct Answer
verified

Which of the following is not required of an agency relationship?

Correct Answer
verified
A

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Correct Answer
verified
In determining if agents are employees o...
View Answer

Which of the following persons is an agent?

Correct Answer
verified

Exam 28: Agency Law

Correct AnswerverifiedYes.Barnett violated his fiduciary duty ...View AnswerShow Answer

Generally,either party to an agency relationship has the power to terminate it at any time.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMegaCorp.Regardless of why Alex no longe...View AnswerShow Answer

Jim agreed to show Donna's car to a potential buyer.Donna was not able to be home since she had to attend a meeting.After showing the car,Jim left the keys in it and the car was stolen.Which statement is correct?

Correct AnswerverifiedShow Answer

John hired Tim to sell his house.Which statement is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

The bankruptcy of an agent automatically terminates an agency relationship.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The equal dignities rule relative to agency law applies to an agent:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe major issue here is abandonment.Watk...View AnswerShow Answer

Tom,the production manager at Esday,was told by his supervisor to hire Elton,a 15- year-old,to operate an industrial machine.Hiring the 15-year-old violates the child labor laws.Tom:

Correct AnswerverifiedShow Answer

If Denise is hired to work as a cashier,she has the implied authority to do acts reasonably necessary to carry out her job.

Correct AnswerverifiedShow Answer

When a principal is partially disclosed:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

If apparent authority is present,the principal is liable for even the unauthorized acts of the agent.

Correct AnswerverifiedShow Answer

Which of the following is not required of an agency relationship?

Correct AnswerverifiedA

Andrew has been hired to do some work for Rossi Enterprises.What factors would a court consider in determining if Andrew is an employee or an independent contractor? Why does the designation matter?

Correct AnswerverifiedIn determining if agents are employees o...View AnswerShow Answer

Which of the following persons is an agent?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Yes.Barnett violated his fiduciary duty ...
View Answer

Correct Answer
verified

Correct Answer
verified
MegaCorp.Regardless of why Alex no longe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The major issue here is abandonment.Watk...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified
In determining if agents are employees o...
View Answer

Correct Answer
verified