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114. Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he
negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom
committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be?
a. Lyle must pay Tom out of his own pocket
b. Tom may sue Lyle but not Thelma to enforce the contract
c. Tom can be justified in presuming Lyle had authority to sign the contract only if Tom asked Thelma
d. if Tom was justified in presuming Lyle had authority to sign the contract, Thelma will be responsible
e. neither Lyle nor Thelma will be responsible for paying because Lyle exceeded his duty of accounting to
Thelma
115. Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he
negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom
committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be?
a. Lyle must pay Tom out of his own pocket
b. Tom may sue Lyle but not Thelma to enforce the contract
c. Tom can be justified in presuming Lyle had authority to sign the contract only if Tom asked Thelma
d. neither Lyle nor Thelma will be responsible for paying because Lyle exceeded his duty of accounting to
Thelma
e. none of the other choices
116. The law of agency places its primary emphasis on the duties:
a. the principal owes to the agent
b. the agent owes to the principal
c. the agent owes to the subagent
d. the universal agent owes to the general agent
e. all of the other choices have equal standing
117. The law of agency places its primary emphasis on the duties:
a. the principal owes to the agent
b. the agent owes to the subagent
c. the universal agent owes to the general agent
d. all of the other specific choices have equal legal weights
e. none of the other choices
118. The duties of a principal to an agent do not include:
a. cooperating with the agent
b. paying agent for services rendered
c. reimbursing the agent for any reasonable expense
d. indemnifying the agent for legal liability incurred in completing the purpose of the agency
e. all of the other choices are required
119. The duties of a principal to an agent do not include:
a. cooperating with the agent
b. allowing the agent "significant discretion"
c. reimbursing the agent for any reasonable expense
d. indemnifying the agent for legal liability incurred in completing the purpose of the agency
e. all of the other choices are required
120. The principal has a
agency.
a. duty to inform
b. duty to cooperate
c. duty to compensate
d. duty to reimburse
e. duty to indemnify
with her agent by performing responsibilities defined in the agreement forming the
121. The principal has a
agency.
a. duty to inform
b. duty to indemnify
c. duty to compensate
d. duty to reimburse
with her agent by performing responsibilities defined in the agreement forming the
e. none of the other choices are correct
122. Which of the following is part of the principal's duty to cooperate:
a. providing a safe working environment
b. warning the agent of any unreasonable risk associated with the agency
c. not furnishing goods of inferior quality to the agent
d. all of the other specific choices are correct
e. none of the other choices are correct
123. If an agency agreement did not specify how much an agent would be paid for his work, the principal has a
the "customary" amount.
a. duty to cooperate
b. duty to compensate
c. duty of obedience to
d. duty to indemnify
e. none of the other choices would apply
124. If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the
principal must pay the agent:
a. for the reasonable value of the services provided
b. at least half the customary rate
c. for the rational value of the services provided
d. however much the agent demands
e. however much the agent's attorney demands
125. If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the
principal must pay the agent:
a. however much the agent's attorney demands
b. at least half the customary rate
c. for the rational value of the services provided
d. however much the agent demands
e. none of the other choices are correct
126. A principal has a the agent for reasonable expenses incurred in carrying out the duties of the agency.
a. duty to cooperate with
b. duty of loyalty to
c. duty to reimburse
d. duty of obedience to
e. none of the other choices would apply
127. The principal is under a for damages to cover the agent's losses (such as from litigation) suffered while
undertaking authorized transactions for the principal.
a. duty to cooperate
b. duty of loyalty
c. duty of obedience
d. duty to indemnify
e. none of the other choices would apply in such case
128. The principal's duty to reimburse dose not cover expenses:
a. incurred during business hours
b. incurred due to the agent's misconduct or negligence
c. incurred by the agent while conducting business for the principal
d. incurred while traveling to do business for the principal
e. none of the other choices are correct
129. Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses
his flight to Chicago so he has to buy a second plane ticket. As principal, Lee:
a. has a duty to reimburse Scott for the second plane ticket
b. does not have a duty to reimburse Scott for the second plane ticket because it was Scott's fault he had to buy
it
c. has a duty to reimburse Scott for half the plane ticket
d. has a duty to reimburse Scott for 1/3 of the plane ticket
e. does not have a duty to reimburse Scott for the ticket because he had no duty to reimburse Scott for a plane
ticket to Chicago anyway
130. Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses
his flight to Chicago so he has to buy a second plane ticket. As principal, Lee:
a. has a duty to reimburse Scott for the second plane ticket
b. does not have a duty to reimburse Scott for the ticket because he had no duty to reimburse Scott for a plane
ticket to Chicago anyway
c. has a duty to reimburse Scott for half the plane ticket
d. has a duty to reimburse Scott for 1/3 of the plane ticket
e. none of the other choices are correct
131. The principal's duty to indemnify the agent means the principal must:
a. pay reasonable wages to the agent
b. insure the agent against losses suffered during the course of authorized transactions
c. pay for expenses incurred by agent that result from negligent behavior
d. refrain from providing the agent with inferior goods
e. pay reasonable wages to the agent and refrain from providing the agent with inferior goods
132. The principal's duty to indemnify the agent means the principal must:
a. pay reasonable wages to the agent
b. pay reasonable wages to the agent and refrain from providing the agent with inferior goods
c. pay for expenses incurred by agent that result from negligent behavior
d. refrain from providing the agent with inferior goods
e. none of the other choices are correct
133. Insuring an agent against losses suffered during the course of authorized transactions is part of the principal's:
a. duty of cooperation
b. duty of facilitation
c. duty to indemnify
d. duty to protect
e. duty to reimburse
134. Insuring an agent against losses suffered during the course of authorized transactions is part of the principal's:
a. duty of cooperation
b. duty of facilitation
c. duty to reimburse
d. duty to protect
e. none of the other choices are correct
135. For an agent to be a fiduciary means to:
a. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees
b. have the right and obligation to sell goods belonging to a principal
c. occupy a position of trust, honesty, and confidence with respect to the principal
d. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees and have the right
and obligation to sell goods belonging to a principal
e. indemnify the principal for any losses incurred in a lawsuit, not including attorney's fees and have the right
and obligation to sell goods belonging to a principal and occupy a position of trust, honesty, and confidence
with respect to the principal
136. Which of the following is not a duty owed by the agent to the principal:
a. loyalty
b. reasonable care
c. accounting
d. notification
e. all of the other choices are required
137. Which of the following is not a duty owed by the agent to the principal:
a. compensation
b. reasonable care
c. accounting
d. notification
e. all of the other choices are required
138. An agent is a(n) of the principal, which means that the agent occupies a position of trust, honesty, and
confidence for the principal.
a. employee
b. fiduciary
c. legal aid
d. friend
e. business partner
139. Fiduciary duties include:
a. accounting, notification, and performance
b. loyalty and reasonable care
c. ratification and indemnification
d. accounting, notification, performance, loyalty and reasonable care
e. accounting, notification, performance, loyalty, reasonable care, ratification and indemnification
140. The duty of
of any third party:
a. accounting
b. loyalty
c. performance
requires an agent to place the principal's interests before the agent's personal interests or those
d. reasonable care
e. none of the other choices; there is no such duty
141. The duty of
of any third party:
a. accounting
b. indemnity
c. performance
requires an agent to place the principal's interests before the agent's personal interests or those
d. reasonable care
e. none of the other choices
142. The duty of loyalty:
a. requires a principal to place the agent's interests before the principal's personal interests or those of any third
party
b. requires an agent to place the principal's interests before the agent's personal interests or those of any third
party
c. requires the agent to work for only one principal at a time
d. requires the agent to work without compensation if necessary
e. refers to the medieval roots of agency law
143. The duty of loyalty:
a. requires a principal to place the agent's interests before the principal's personal interests or those of any third
party
b. refers to the medieval roots of agency law
c. requires the agent to work for only one principal at a time
d. requires the agent to work without compensation if necessary
e. none of the other choices are correct
144. If an agent competes with his principal without the principal's consent:
a. he is violating his duty of loyalty
b. he is violating his duty of cooperation
c. he is violating his duty to reimburse
d. he is violating his duty to play fair
e. he is violating his duty of obedience and performance
145. If an agent competes with his principal without the principal's consent:
a. he is violating his duty of obedience and performance
b. he is violating his duty of cooperation
c. he is violating his duty to reimburse
d. he is violating his duty to play fair
e. none of the other choices are correct
146. Because of the
principal.
an agent may not represent another party whose interests are in conflict with those of the
a. duty of non-competition
b. duty of cooperation
c. duty of loyalty
d. duty to reimburse
e. duty of obedience and performance
147. Because of the
principal.
an agent may not represent another party whose interests are in conflict with those of the
a. duty of non-competition
b. duty of cooperation
c. duty of obedience and performance
d. duty to reimburse
e. none of the other choices are correct
148. An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as
$80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are:
a. a legitimate effort to get the deal done that will benefit everyone involved
b. a violation of the duty of accounting
c. a violation of the duty of loyalty
d. a violation of the duty of notification to let the principal know he can counter-offer at a higher price
e. unethical, but it does not violate legal duties
149. An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as
$80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are:
a. a legitimate effort to get the deal done that will benefit everyone involved
b. a violation of the duty of accounting
c. a violation of the duty of notification
d. unethical, but it does not violate legal duties
e. none of the other choices
150. The buyer for an electronics store is bribed by a supplier to order more of the brand sold by the supplier. This action
violates which of the agent's duties?
a. notify
b. account
c. loyalty
d. indemnity
e. all of the other choices
151. An agent must perform instructions provided by the principal. If the agent fails to do so, he violates:
a. the duty of cooperation
b. the duty of obedience and performance
c. the duty to reimburse
d. the duty of loyalty
e. the duty of accounting
152. An agent must perform instructions provided by the principal. If the agent fails to do so, he violates:
a. the duty of cooperation
b. the duty of accounting
c. the duty to reimburse
d. the duty of loyalty
e. none of the other choices are correct
153. Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the
Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and
purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage
facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted
in:
a. violation of her duty of loyalty
b. violation of her duty of obedience
c. violation of her duty of accounting
d. accordance with her duty of accounting
e. accordance with her duty of reasonable care
154. Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the
Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and
purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage
facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted
in:
a. violation of her duty of loyalty
b. violation of her duty of obedience
c. violation of her duty of accounting
d. accordance with her duty of accounting
e. none of the other choices
155. The duty of an agent to perform responsibilities with the degree of care that a reasonable person would exercise
under the circumstances is:
a. the duty to cooperate
b. the duty of reasonable care
c. the duty of realistic care
d. the duty of obedience
e. the duty of reasonable obligation
156. The duty of an agent to perform responsibilities with the degree of care that a reasonable person would exercise
under the circumstances is:
a. the duty to cooperate
b. the duty of reasonable obligation
c. the duty of realistic care
d. the duty of obedience
e. none of the other choices are correct
157. An agent has a
possession.
the funds and property of his principal that have been entrusted to him or have come into his
a. duty to compensate for
b. duty to reimburse
c. duty to account for
d. duty to document
e. duty to increase
158. An agent has a
possession.
the funds and property of his principal that have been entrusted to him or have come into his
a. duty to compensate for
b. duty to reimburse
c. duty to increase
d. duty to document
e. none of the other choices are correct
159. An agent must be able to show where money or property comes from and goes to because of his duty:
a. to account
b. to notify
c. of loyalty
d. of responsibility
e. to profit
160. An agent must be able to show where money or property comes from and goes to because of his duty:
a. to profit
b. to notify
c. of loyalty
d. of responsibility
e. none of the other choices are correct
161. The duty of an agent not to mix personal funds with the funds of the principal is the duty:
a. to account
b. of loyalty
c. to notify
d. to perform
e. none of the other choices, unless instructed not to do this
162. The duty of an agent not to mix personal funds with the funds of the principal is the duty:
a. of reasonable care
b. of obedience
c. to notify
d. to perform
e. none of the other choices, unless instructed not to do this
163. Bill is an attorney in Ohio. Marla hires Bill to create a trust for her children. Bill has not been keeping up with
developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much
more beneficial trust. In this case, Bill:
a. has violated a duty of loyalty
b. has violated a duty of reasonable care
c. has violated a duty of obedience
d. has violated a duty to account
e. may be out-of-date but has violated no duties
164. Bill is an attorney in Ohio. Marla hires Bill to create a trust for her children. Bill has not been keeping up with
developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much
more beneficial trust. In this case, Bill:
a. has violated a duty of loyalty
b. has violated a duty to account
c. has violated a duty of obedience
d. may be out-of-date but has violated no duties
e. none of the other choices
165. The duty of an agent to keep his principal informed of all facts relevant to the agency purpose is called the duty:
a. to account
b. of performance
c. of reasonable care
d. to inform
e. of loyalty
166. The duty of an agent to keep his principal informed of all facts relevant to the agency purpose is called the duty:
a. to account
b. of obedience
c. to indemnify
d. of loyalty
e. none of the other choices
167. Because of the duty to inform, an agent must:
a. be able to show where money or property comes from and goes to
b. keep her principal informed of all facts relevant to the agency
c. engage in acts that could lead to personal liability
d. perform responsibilities with the degree of care that a reasonable person would exercise under the
circumstances
e. record all transactions related to the agency
168. Because of the duty to inform, an agent must:
a. be able to show where money or property comes from and goes to
b. record all transactions related to the agency
c. engage in acts that could lead to personal liability
d. perform responsibilities with the degree of care that a reasonable person would exercise under the
circumstances
e. none of the other choices are correct
