Question 1

If an agency is gratuitous, the principal ordinarily may revoke it without liability to the agent.

Accepted Answer

A) True 
 B)False

Question 2

The concept of conflict of interest as it relates to the law of agency includes which of the following?

Accepted Answer

A)   An agent may take a position that conflicts with the principal only if the principal, with full knowledge of all the facts, consents.
B)   An agent may not represent her principal in a transaction in which the agent has a personal interest.
C)   An agent may not act on behalf of adverse parties to a transaction without both principals' approval of the dual agency.
D)   All of these.E) None of the above
F) A) and B)

Question 3

Whether an agency relationship has been created is determined by using a subjective test.

Accepted Answer

A) True 
 B)False

Question 4

A __________ is a written, formal appointment of an agent.

Accepted Answer

A)   power of attorney
B)   revocation
C)   fiduciary
D)   rescissionE) B) and C)
F) A) and B)

Question 5

Discuss the nature of agency, including the scope of agency purposes.

Accepted Answer

Agency is a consensual relationship betw...

Question 6

a.What is a fiduciary? 
b.What are the implications of an agent's fiduciary obligation? What is an agent prohibited from doing as a result of this obligation? Explain.

Accepted Answer

a.A fiduciary is someone who acts for so...

Question 7

Jones, an agent of Rossi, is authorized 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.

Accepted Answer

A) True 
 B)False

Question 8

An agency contract appointing the agent for a period of more than one year must be in writing.

Accepted Answer

A) True 
 B)False

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is correct with regard to the capacity of an agent?

Accepted Answer

A)   If an incompetent person who is not under guardianship appoints an agent, contracts made by that agent are voidable.
B)   No mental capacity is necessary for an agent.
C)   The incapacity of the agent disqualifies him from making a contract that is binding on his principal.
D)   A young child or a person under guardianship has the capacity to act as an agent.E) A) and B)
F) A) and C)

Question 11

What is an independent contractor? Can an independent contractor also be an agent? Explain.

Accepted Answer

An independent contractor is someone who...

Question 12

Agents and principals have mutual fiduciary duties to one another.

Accepted Answer

A) True 
 B)False

Question 13

All of the following except which one is a duty of an agent?

Accepted Answer

A)   Refrain from competing with his principal.
B)   After the agency is terminated, refrain from using any information gained while an agent.
C)   Inform his principal of any information relevant to his agency.
D)   Account for money received on behalf of his principal.E) B) and C)
F) A) and D)

Question 14

Steven is a manufacturer's representative for Incell Corporation.One day he receives a big-screen television as a gift from one of the clients he contacts on behalf of Incell.

Accepted Answer

A)   Steven must account to Incell for the gift he has received.
B)   The big-screen television belongs to Incell rather than to Steven.
C)   If he keeps the TV without telling Incell, he will have breached his fiduciary duty.
D)   All of these are correct.E) A) and C)
F) C) and D)

Question 15

E-Sign specifically excludes:

Accepted Answer

A)   all transactions covered by the UCC.
B)   wills and matters of family law.
C)   transactions relating to foreign commerce.
D)   All of these.E) B) and D)
F) A) and D)

Question 16

A gratuitous agent is not subject to the same duty of loyalty that is imposed upon a paid agent.

Accepted Answer

A) True 
 B)False

Question 17

A plumber hired to redo the plumbing in a building is an independent contractor and an agent of the owner of the building.

Accepted Answer

A) True 
 B)False

Question 18

A power given as security creates a relationship of agency and actual authority.

Accepted Answer

A) True 
 B)False

Question 19

The agent may be subject to liability to her principal for breach of the duty of obedience if she:

Accepted Answer

A)   entered into an authorized contract and the principal has changed her mind.
B)   delegates her authority in any way and under any circumstances.
C)   committed a tort for which the principal is now liable.
D)   All of these.E) None of the above
F) C) and D)

Question 20

An agency agreement must always be in writing.

Accepted Answer

A) True 
 B)False

Exam 28: Relationship of Principal and Agent

Steven is a manufacturer's representative for Incell Corporation.One day he receives a big-screen television as a gift from one of the clients he contacts on behalf of Incell.

Correct AnswerverifiedShow Answer

If an agency is gratuitous, the principal ordinarily may revoke it without liability to the agent.

Correct AnswerverifiedShow Answer

An agency contract appointing the agent for a period of more than one year must be in writing.

Correct AnswerverifiedShow Answer

The concept of conflict of interest as it relates to the law of agency includes which of the following?

Correct AnswerverifiedShow Answer

E-Sign specifically excludes:

Correct AnswerverifiedShow Answer

Whether an agency relationship has been created is determined by using a subjective test.

Correct AnswerverifiedShow Answer

Which of the following is correct with regard to the capacity of an agent?

Correct AnswerverifiedShow Answer

A power given as security creates a relationship of agency and actual authority.

Correct AnswerverifiedShow Answer

a.What is a fiduciary? b.What are the implications of an agent's fiduciary obligation? What is an agent prohibited from doing as a result of this obligation? Explain.

Correct Answerverifieda.A fiduciary is someone who acts for so...View AnswerShow Answer

Agents and principals have mutual fiduciary duties to one another.

Correct AnswerverifiedShow Answer

Jones, an agent of Rossi, is authorized 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.

Correct AnswerverifiedShow Answer

A __________ is a written, formal appointment of an agent.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

What is an independent contractor? Can an independent contractor also be an agent? Explain.

Correct AnswerverifiedAn independent contractor is someone who...View AnswerShow Answer

A plumber hired to redo the plumbing in a building is an independent contractor and an agent of the owner of the building.

Correct AnswerverifiedShow Answer

All of the following except which one is a duty of an agent?

Correct AnswerverifiedShow Answer

A gratuitous agent is not subject to the same duty of loyalty that is imposed upon a paid agent.

Correct AnswerverifiedShow Answer

Discuss the nature of agency, including the scope of agency purposes.

Correct AnswerverifiedAgency is a consensual relationship betw...View AnswerShow Answer

The agent may be subject to liability to her principal for breach of the duty of obedience if she:

Correct AnswerverifiedShow Answer

An agency agreement must always be in writing.

Correct AnswerverifiedShow Answer

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a.A fiduciary is someone who acts for so...
View Answer

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An independent contractor is someone who...
View Answer

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Agency is a consensual relationship betw...
View Answer

Correct Answer
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