Business Law, 8e: Chapter 29

Chapter 29
Agency: Creation and Termination:

Your Full Name:

Your Email Address:

The Email address of an instructor to mail your quiz results:

1. John is the vice president for Enterprises, Inc. John is an agent and an employee of Enterprises.: a. True
b. False

2. Unless otherwise provided, agency relationships are terminable-at-will.: a. True
b. False

3. An agency relationship cannot be created without consideration.: a. True
b. False

5. A minor may not act as an agent for a principal since a minor lacks contractual capacity.: a. True
b. False

6. A principal cannot be held liable for the acts of an agent unless the agent is being paid for performing those specific acts.: a. True
b. False

7. If an agent makes a secret profit at the expense of his or her principal, the agent has breached his or her fiduciary duty to the principal.: a. True
b. False

8. A special agent is an agent who is appointed to perform one transaction on the principal's behalf.: a. True
b. False

9. If an employer employs an independent contractor to conduct hazardous activities, the employer may be held liable for injuries that occur due to the hazard.: a. True
b. False

10. If an agent breaches his or her duty to give the principal notice, the agent may have to indemnify the principal for any damages suffered as a result of the breach of duty.: a. True
b. False

11. Janice is Don's agent for purposes of selling real estate. Yada, a prospective buyer, gives some very important information to Janice related to the real estate Don is selling. However, Janice neglects to tell Don anything about this information. Later, Don fails to take a necessary action because she is ignorant of the information from Yada. As a result, Yada files a lawsuit against Don for her failure to take action. Assuming that Don can be held liable for her inaction only if she had actual or constructive knowledge of the information, which statement below accurately describes Don's legal position?: a. Don will not be held liable because she did not have the information.
b. Don will be held liable because the information given to Janice is imputed to Don.
c. Don cannot hold Janice liable for any damages imposed on her in this lawsuit.
d. All of the above.

12. Ellen is Kurt's agent. Kurt has given Ellen $10,000 to use in pursuit of agency objectives. Ellen has placed these funds in a special account. Yesterday, Ellen used $500 from the special account to buy herself a compact disc player. She intended to replace the funds in the account, but was unable to. In this case, Kurt could:: a. impose a constructive trust.
b. terminate the agency.
c. hold Ellen liable of breaching her fiduciary duty.
d. All of the above.

13. Timothy owns a large pork-processing firm and Kurt is his sales agent. Kurt has been attempting to negotiate a deal with Beowulf, a prospective buyer of large quantities of pork. The negotiations have been going very slowly. In their last phone conversation, Timothy told Kurt, "In your next session with Beowulf, be sure to tell him that he's a stupid, flea-bitten, repulsive-looking cretin who wouldn't know decent pork if it was stuffed up his nose. Make sure you do it in private, though. That's an order." Kurt does not think that this will be helpful in the negotiations, and tells Timothy so. Timothy repeats, "You have your orders." Assuming that he does not wish to resign as agent, what should Kurt do?: a. Refrain from calling Beowulf insulting names, because Kurt does not believe that doing so will be in Timothy's best interests.
b. Insult Beowulf in the specified manner, because Timothy told him to and it's not illegal.
c. Insult Beowulf publicly, because this will probably be more effective.
d. Refrain from insulting Beowulf if Kurt believes the instructions are capricious or unwise.

14. Gargantua is doing some work for Rabelais. Gargantua commits a tort within the scope of his work. In which of the following situations is Rabelais most likely to be held liable?: a. Gargantua is a laborer who agreed to dig a ditch for Rabelais for a flat fee, choosing his own tools, methods, and schedule.
b. Gargantua is a plumber who came to repair Rabelais's leaky toilet.
c. Gargantua is a carpenter who agreed to build a desk for Rabelais.
d. Gargantua is a truck driver using Rabelais' truck.

15. If an agency agreement does not specify a set date, a set period, or a set occurrence that will terminate the relationship, the relationship is best described as:: a. a resulting agency.
b. an agency at will.
c. an illusory agency.
d. a constructive trust.