Cory employs Daily Delivery Agency as an agent under a written agreement that describes the rights and duties of both parties. This is
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
c. express authority.
In considering the scope of an agent’s implied authority, the test is whether the agent reasonably believed that he or she had the authority.
True
False
True
A power of attorney is a written document.
True
False
True
An agency relationship may be created for any legal purpose.
True
False
True
The equal dignity rule does not apply to a corporate officer who, in an ordinary business situation, acts on behalf of his or her firm.
True
False
True
Express authority is authority declared in clear, direct, definite terms.
True
False
True
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, “Buy your carpet here, and I’ll install it for half of what the store would charge.” Dita buys the carpet, which Bob installs for half the store’s price. Bob keeps the money. Bob has breached
a. no duty.
b. the duty of loyalty.
c. the duty of notification.
d. the duty of obedience.
b. the duty of loyalty.
A fiduciary relationship allows parties to avoid obligations without liability.
True
False
False
Jody is an agent for Insta Cross Country Trucking Inc. In the course of Jody’s performance for the firm, Jody pays Heck for certain vehicle maintenance and repair services. Jody’s right to obtain the amount of those payments from Insta arises under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
d. reimbursement
Lather Up Soap Products Company grants its agent Kathy an exclusive territory in which to sell Lather Up products. The firm cannot compete with Kathy in that territory under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
b. cooperation
An agency relationship can be formed without consideration.
True
False
True
Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached
a. no duty.
b. the duty of accounting.
c. the duty of loyalty.
d. the duty of notification.
c. the duty of loyalty.
Kady, an agent for Lebron, enters into a contract on Lebron’s behalf with Madge that must be in writing to be enforceable under the Statute of Frauds. Kady’s authority to enter into this contract is not in writing. Under the equal dignity rule, this contract is
a. enforceable.
b. void.
c. voidable at Lebron’s option.
d. voidable at Madge’s option.
c. voidable at Lebron's option.
A corporate officer is not an agent for the corporation.
True
False
False
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as to the level of sales that Rita is expected to achieve. She must
a. achieve nothing because the agreement says nothing on the issue.
b. attain the level that Rita achieved with her previous employer.
c. maintain the level Superior attained before Rita became an agent.
d. use reasonable diligence and skill in selling.
d. use reasonable diligence and skill in selling.
An agency relationship may not occur by operation of law in a family.
True
False
False
A principal who causes a third person to believe that another person is the principal’s agent can be estopped from denying the agency relationship.
True
False
True
Ozzy is an officer of Prudent Financial Corporation. Ozzy serves in a representative capacity for Prudent Financial’s owners. With respect to binding Prudent Financial to contracts, Ozzy is
a. an agent and has the authority.
b. an agent but does not have the authority.
c. not an agent and does not have the authority.
d. not an agent but does have the authority.
a. an agent and has the authority.
Elle is an agent for Fine Cosmetics, Inc. Elle owes Fine Cosmetics the duty of
a. avoidance.
b. compensation.
c. indemnification.
d. performance.
d. performance
Employees who deal with third parties are agents of their employers.
True
False
True
An agency relationship cannot exist in the absence of a formal agreement.
True
False
False
A licensed professional can employ an unlicensed agent to perform professional actions.
True
False
False
Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial transactions on Miklos’s behalf. This power will terminate on
a. any transaction causing a loss to Miklos.
b. Miklos’s death or incapacity.
c. Miklos’s sixty-fifth birthday.
d. Nathalie’s handling of one of each stipulated transaction.
b. Miklos's death or incapacity
KupaJava hires Lola to manage one of KupaJava’s seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava’s
a. employee.
b. independent contractor.
c. principal.
d. work for hire.
a. employee
Before a principal can ratify a contract, the principal must know all of the material facts involved in the deal.
True
False
True
For an agent’s implied authority to be effective, a principal must confirm it in writing.
True
False
False
Bubbly Soda Company hires Carlo to work on Bubbly’s shipping dock, checking outgoing loads and dispatching Bubbly’s drivers. With respect to Carlo, Bubbly is most likely
a. an employee.
b. an agent.
c. an independent contractor.
d. a principal.
d. a principal
Oscar is Precise Service Company’s chief executive officer. On Precise’s behalf, Oscar solicits business, hires and fires workers, and handles the finances. Precise pays Oscar varying amounts, depending on his “needs.” Oscar is most likely
a. a principal.
b. an employee.
c. an employer.
d. an independent contractor.
b. an employee
If a principal does not ratify an authorized contract, the principal is not bound.
True
False
False
Genetic Seed Company hires Howie to work on Genetic’s shipping dock, accepting deliveries and dealing with other companies’ drivers. With respect to Genetic, Howie is most likely
