169. Terry hires an agent, Janet, to sell a piece of property for no less than $50,000 with Janet to receive a 6%
commission upon sale. Which of the following is Janet legally permitted to do without Terry‘s consent?
a. Janet can sell the property to her brother for $50,000
b. Janet discovers land values in the area are falling rapidly and, not having a chance to consult with Terry, sells
the property for $45,000
c. Janet discovers land values in the area are likely to jump up soon and so purchases the property for herself
d. any of the other specific choices
e. none of the other choices
170. In Bearden v. Wardley Corp., where Gritton’s real estate agent cheated her in a deal, the court held that Wardley,
Gritton’s employer, violated its to Bearden:
a. duty to inform
b. duty of performance
c. duty to account
d. duty of care
e. none of the other choices; Wardley was not responsible
171. In Bearden v. Wardley Corp., where Gritton’s real estate agent cheated her in a deal, the court held that Wardley,
Gritton’s employer, violated its to Bearden:
a. duty to inform
b. duty of performance
c. duty to account
d. duty of obedience
e. none of the other choices; Wardley was not responsible
172. In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house
from her and then cheated her on the transaction, the court held that:
a. Gritton was liable for breaching his duty to Bearden, but Wardley had no knowledge of Gritton‘s actions so
was not liable
b. Gritton was liable for theft, but not for breach of his duty as an agent to Bearden, since that relationship
expired before Gritton cheated Bearden
c. Gritton and Wardley violated their fiduciary obligations to Bearden, so both are liable
d. neither party was liable to Bearden because the contract was legitimate and her claim that she had been
cheated by her agent, Gritton, was unfounded
e. none of the other choices
173. In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house
from her and then cheated her on the transaction, the court held that:
a. Gritton was liable for breaching his duty to Bearden, but Wardley had no knowledge of Gritton‘s actions so
was not liable
b. Gritton was liable for theft, but not for breach of his duty as an agent to Bearden, since that relationship
expired before Gritton cheated Bearden
c. Wardley was liable to Bearden because Gritton was its agent, but Gritton was not liable to Bearden because
he had no legal obligation to her, only to Wardley
d. neither party was liable to Bearden because the contract was legitimate and her claim that she had been
cheated by her agent, Gritton, was unfounded
e. none of the other choices
174. In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house
from her and then cheated her on the transaction, the court held that:
a. both Wardley and Gritton owed Bearden fiduciary duties and so both were liable
b. neither Wardley nor Gritton owed Bearden fiduciary duties and so neither was liable
c. only Wardley owed Bearden fiduciary duties and so only Warden was liable
d. only Gritton owed Bearden fiduciary duties and so only Gritton was liable
e. none of the other choices are correct
175. A disclosed principal is a principal whose identity is:
a. known to the agent
b. unknown to the agent
c. unknown to third parties to contracts entered into with the agent
d. known to partners
e. known to third parties to contracts entered into with the agent
176. A disclosed principal is a principal whose identity is:
a. known to the agent
b. unknown to the agent
c. unknown to third parties to contracts entered into with the agent
d. known to partners
e. none of the other choices
177. A(n) is one whose identity is known by the third party at the time a contract is entered into with an agent.
a. undisclosed principal
b. disclosed principal
c. specific principal
d. legitimate principal
e. clear principal
178. A(n) is one whose identity is known by the third party at the time a contract is entered into with an agent.
a. undisclosed principal
b. clear principal
c. specific principal
d. legitimate principal
e. none of the other choices are correct
179. A(n)
principal.
is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the
a. undisclosed principal
b. disclosed principal
c. specific principal
d. legitimate principal
e. clear principal
180. A(n)
principal.
is liable to a third party for a contract made by an agent who had actual authority to act on behalf of the
a. undisclosed principal
b. clear principal
c. specific principal
d. legitimate principal
e. none of the other choices are correct
181. An undisclosed principal is:
a. known to the agent
b. unknown to the agent
c. unknown to third parties to contracts entered into with the agent
d. known to partners
e. known to third parties to contracts entered into with the agent
182. An undisclosed principle is:
a. known to the agent
b. unknown to the agent
c. known to third parties to contracts entered into with the agent
d. known to partners
e. none of the other choices
183. A(n)
agent.
is one whose identity is unknown by the third party at the time when a contract is entered into with an
a. undisclosed principal
b. disclosed principal
c. specific principal
d. legitimate principal
e. clear principal
184. A(n)
agent.
is one whose identity is unknown by the third party at the time when a contract is entered into with an
a. clear principal
b. disclosed principal
c. specific principal
d. legitimate principal
e. none of the other choices are correct
185. When there is an undisclosed principal, the agent is:
a. liable to the third party for the principal’s nonperformance of the contract
b. not liable to the third party for the principal’s nonperformance of the contract
c. liable to the undisclosed principal for the third party‘s nonperformance of the contract
d. liable for only half of the damages incurred by the principal’s nonperformance of the contract
e. none of the other choices are correct
186. Cook instructs Chan, her agent, to buy a van for her business. Chan contracts for a van with a third party, who
knows that Chan is an agent. If Cook does not like the van and refuses to pay for it, the seller may sue:
a. Chan because she did not have authority to enter into a final contract without permission
b. Cook because Chan has actual authority to make a contract on behalf of her principal
c. Cook if Chan signed the contract expressly on behalf of Cook; that is, the principal was revealed before the
contract was made
d. Cook but only if Chan has apparent authority to enter into the contract
e. no one; there was no valid contract
187. Barbara, a purchasing agent for UTA, was fired for good reason. Being angry about her dismissal, she calls one of
UTA’s suppliers and orders 1,000 purple widgets UTA does not need. If UTA, the principal, is held liable for this
transaction, it is because Barbara had:
a. express authority
b. implied authority
c. apparent authority
d. actual authority
e. none of the other choices apply
188. The principal may hold the third party to a contract, in an undisclosed principal situation, except when the:
a. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party
b. agent’s performance is personal to the contract
c. contract, when a negotiable instrument, does not include the identity of the principal or existence of the
agency relationship
d. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or
the agent’s performance is personal to the contract
e. undisclosed principal is expressly excluded as a party to the contract between the agent and the third party or
the agent’s performance is personal to the contract or the undisclosed principal is expressly excluded as a
party to the contract between the agent and the third party or the agent’s performance is personal to the
contract
189. In Yim v. J’s Fashion Accessories, Inc., where J’s Fashion sued Yim for failing to pay for goods he bought under
the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung
Enterprise, Inc which also did business under the name Ho Tae, the courts held that:
a. Yim was not liable because he was an agent of Hosung Enterprise, Inc.
b. Yim was not liable, even though he was an agent of Hosung Enterprise, Inc.
c. Yim was liable because he never disclosed Hosung Enterprise, Inc. as the principal
d. Yim was not liable because he had apparent authority
e. Yim was liable because he disclosed Hosung Enterprise, Inc. as the principal
190. In Yim v. J’s Fashion Accessories, Inc., where J’s Fashion sued Yim for failing to pay for goods he bought under
the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung
Enterprise, Inc which also did business under the name Ho Tae, the courts held that:
a. Yim was not liable because he was an agent of Hosung Enterprise, Inc.
b. Yim was not liable, even though he was an agent of Hosung Enterprise, Inc.
c. Yim was liable because he disclosed Hosung Enterprise, Inc. as the principal
d. Yim was not liable because he had apparent authority
e. none of the other choices are correct
191. In Yim v. J’s Fashion Accessories, Inc., where J’s Fashion sued Yim for failing to pay for goods he bought under
the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung
Enterprise, Inc which also did business under the name Ho Tae, the courts held that Yim was liable because:
a. the duty to disclose the principal is on the agent and Yim did not disclose Hosung Enterprise, Inc. as the
principal
b. the duty to disclose the principal is on the third party and J’s Fashion did not disclose Hosung Enterprise, Inc.
as the principal
c. Hosung Enterprise, Inc. was a limited liability company and so could not be held liable
d. Yim made the contract without identifying Hosung Enterprise, Inc. as the agent
e. Yim unlawfully disclosed Hosung Enterprise, Inc. as the principal
192. In Yim v. J’s Fashion Accessories, Inc., where J’s Fashion sued Yim for failing to pay for goods he bought under
the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung
Enterprise, Inc which also did business under the name Ho Tae, the courts held that Yim was liable because:
a. Yim unlawfully disclosed Hosung Enterprise, Inc. as the principal
b. the duty to disclose the principal is on the third party and J’s Fashion did not disclose Hosung Enterprise, Inc.
as the principal
c. Hosung Enterprise, Inc. was a limited liability company and so could not be held liable
d. Yim made the contract without identifying Hosung Enterprise, Inc. as the agent
e. none of the other choices are correct
193. When an agency is terminated:
a. the agent’s authority to act for the principal does not end
b. the agent‘s authority to act for the principal ends
c. the agent’s authority to act for the principal is reduced to very limited conditions
d. the agent may never work with the principal again
e. the agent may not work for someone who is in competition with the principal
194. When an agency is terminated:
a. the agent’s authority to act for the principal does not end
b. the agent may not work for someone who is in competition with the principal
c. the agent’s authority to act for the principal is reduced to very limited conditions
d. the agent may never work with the principal again
e. none of the other choices are correct
195. An agency may not be ended by:
a. unilateral notice by the agent
b. unilateral notice by the principal
c. mutual consent by agent and principal
d. lapse of agreed-upon time
e. all of the other choices may end an agency
196. An agency may not be ended by:
a. unilateral notice by the agent
b. unilateral notice by the principal
c. mutual consent by agent and principal
d. lapse of agreed-upon time
e. decision of a third party opposed to the agency
197. An agency can be ended upon reasonable notice by:
a. only the agent
b. only the principal
c. only the party that initiated the agency
d. either the agent or the principal
e. none of the other choices are correct
198. An agency ends without any action by the principal or the agent through:
a. termination through action
b. termination through inaction
c. termination by operation of law
d. termination by decision of law
e. termination by redefinition
199. An agency ends without any action by the principal or the agent through:
a. termination through action
b. termination through inaction
c. termination by redefinition
d. termination by decision of law
e. none of the other choices are correct
200. Juan and Marie enter into an oral agreement that Marie will sell Juan’s crusty herb garlic bread to gourmet food
stores in the area. This works until Juan gets sick and no longer makes his bread. Marie is furious that Juan is
unable to supply her with the popular bread and sues him for lost profits. A court is likely to rule:
a. Juan cannot abandon the agency relationship he established with Marie
b. Marie‘s authority to act as agent for Juan lapsed and the agency relationship is terminated
c. Juan should pay Marie damages for reducing her income
d. Marie may not be fired because she and Juan had a contract of employment
e. Juan cannot abandon the agency relationship he established with Marie and Juan should pay Marie damages
for reducing her income
201. Juan and Marie enter into an oral agreement that Marie will sell Juan’s crusty herb garlic bread to gourmet food
stores in the area. This works until Juan gets sick and no longer makes his bread. Marie is furious that Juan is
unable to supply her with the popular bread and sues him for lost profits. A court is likely to rule:
a. Juan cannot abandon the agency relationship he established with Marie
b. Marie may not be fired because she and Juan had a contract of employment
c. Juan should pay Marie damages for reducing her income
d. Juan cannot abandon the agency relationship he established with Marie and Juan should pay Marie damages
for reducing her income
e. none of the other choices
202. Adam enters into an oral agreement with Tushar that Tushar will sell Adam’s house for him. A week later, the
house burns down. Adam and Tushar’s agency is now:
a. terminated by operation of law
b. still in place
c. illegal in some states d.
fraudulent in all states e.
temporarily suspended
203. Which of the following would lead to termination by operation of law for an agency:
a. the principal dies
b. the agent dies
c. the subject matter of the agency is destroyed
d. all of the other specific choices are correct
e. none of the other specific choices are correct
204. A(n)
discretion.
relationship is one in which an agent acts on behalf of or for the principal, with a degree of personal
a. principal-agent
b. master-servant
c. employer-employee
d. employer-independent contractor
e. none of the other choices are correct
205. A(n) relationship is one in which one person is an employee whose conduct is controlled by the employer.
a. principal-agent
b. agent-principal
c. employer-employee
d. employer-independent contractor
e. none of the other choices are correct
206. An independent contractor:
a. by law may not serve as an agent for the same employer
b. is not liable for torts committed in the course of employment
c. may not make contracts on behalf of an employer
d. may not work more than one month in any year for one employer
e. none of the other choices
207. A UPS package sorter is an example of a(n):
a. agent
b. employee
c. employee with agency powers
d. independent contractor
e. agent and independent contractor
208. A senior manager at Don Reid Ford is an example of a(n):
a. agent
b. employee
c. employee with agency powers
d. independent contractor
e. agent and independent contractor
209. A real estate agent is an example of a(n):
a. agent
b. employee
c. employee with agency powers
d. independent contractor
e. agent and independent contractor
210. An auctioneer is an example of a(n):
a. agent
b. employee
c. employee with agency powers
d. independent contractor
e. agent and independent contractor
211. An independent contractor is an example of a(n):
a. agent
b. employee
c. employee with agency powers
d. independent contractor
e. agent and independent contractor
212. is a person who contracts with another to do something for him but who is not controlled by the other nor
subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.
a. a special agent
b. an apparent agent
c. an employee
d. an independent contractor
e. a general agent
213. is a person who contracts with another to do something for him but who is not controlled by the other nor
subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.
a. a special agent
b. an apparent agent
c. an employee
d. a general agent
e. none of the other choices
214. The independent contractor is distinguished by:
a. the extent of the compensation
b. the extent of control the employee retains over work performance
c. the extent of control the employer retains over work performance
d. all of the other specific choices are correct
e. none of the other specific choices are correct
215. Attorneys, auctioneers, and other such persons who conduct business on behalf of the principal are examples of:
a. agents who are also employees
b. independent contractors who are also agents
c. independent contractors who are also employers
d. agents who are also employers
e. none of the other choices are correct
216. If a contractor does not have authority to enter into contracts for the principal then:
a. he is not an agent
b. he is also an agent
c. he is also an agent if he thinks he has the authority to enter into contracts
d. he is still considered an agent in most, but not all, states
e. none of the other choices are correct
217. In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who
had employed Quality Metal Roof, a company that contracted with France’s employer, Royalty Builders, to build
them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that:
a. Southern Equipment was liable because they engaged Royalty Builders to do the work
b. Southern Equipment was not liable because they engaged Royalty Builders to do the work and in doing so
passed the liability to Royalty Builders
c. Southern Equipment was liable even though they did not engage Royalty Builders to do the work
d. Southern Equipment was not liable because they did not engage Royalty Builders to do the work and they
had no control over Royalty Builders
e. Southern Equipment was not liable because France was a minor and should not have been working in
construction
218. In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who
had employed Quality Metal Roof, a company that contracted with France’s employer, Royalty Builders, to build
them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that:
a. Southern Equipment was liable because they engaged Royalty Builders to do the work
b. Southern Equipment was not liable because they engaged Royalty Builders to do the work and in doing so
passed the liability to Royalty Builders
c. Southern Equipment was liable even though they did not engage Royalty Builders to do the work
d. Southern Equipment was not liable because France was a minor and should not have been working in
construction
e. none of the other choices are correct