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65. In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held
that his employer, Wardley, was not liable because it had no way to know of his actions.
a. True
b. False
66. In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held
that his employer, Wardley, was liable for his actions because it failed to monitor Gritton's improper actions
sufficiently.
a. True
b. False
67. In Bearden v. Wardley Corp., where real estate agent Gritton cheated Bearden on a house deal, the court held
that his employer, Wardley, was liable for breach of fiduciary duty.
a. True
b. False
68. An agent makes a contract with a third party on behalf of the disclosed principal. The principal then breaches the
contract. The third party may sue the agent to recover damages.
a. True
b. False
69. A principal is contractually liable to a third party if that party enters into a contract presented by an agent with
apparent authority to act for the principal.
a. True
b. False
70. An undisclosed principal is a principal whose identity is unknown to the third party with whom the agent is involved.
a. True
b. False
71. In the case of an undisclosed principal, a third party is unaware of the identity of the principal as well as the
existence of an agency relationship.
a. True
b. False
72. A contract made by an agent on behalf of an undisclosed principal is never binding on a third party who did not
know about the principal.
a. True
b. False
73. In Yin v. J's Fashion Accessories, the court found that Yim was an agent for his company, Hosung, so was not
liable for debts owed by Hosung, the principal.
a. True
b. False
74. In Yin v. J's Fashion Accessories, the court found that Yim was an undisclosed agent for his company, Hosung,
but was liable for debts owed by Hosung, the principal.
a. True
b. False
75. In Yin v. J's Fashion Accessories, the court stated that in most cases if an agent makes a contact without
identifying his principal, the agent incurs personal liability for the contract.
a. True
b. False
76. If either the principal or agent dies, the agency relationship is suspended until replacements continue the agency's
purpose.
a. True
b. False
77. The death of a principal would affect the validity of contracts then made by the agent for the principal.
a. True
b. False
78. An agency relationship may terminate by lapse of time.
a. True
b. False
79. Destruction of the subject matter of an agency ends an agency relationship.
a. True
b. False
80. Agencies may be terminated by operation of law, without either party taking any action.
a. True
b. False
81. If the subject matter of an agency agreement is destroyed, the agency relationship continues until new subject
matter is found.
a. True
b. False
82. A check-out clerk at the grocery store is typically in a master-servant relationship, not an agency relationship.
a. True
b. False
83. Traditionally, employees did not act as agents for their principals, but today employees may well also be agents.
a. True
b. False
84. An independent contractor is not an employee of the person who hires her.
a. True
b. False
85. An independent contractor is an agent and an employee of the person who hired her.
a. True
b. False
86. A stocker in a grocery store is an employee but not an agent for the store.
a. True
b. False
87. A senior manager at a car dealership is likely both an agent and employee.
a. True
b. False
88. A real estate agent who sells a house on commission is an agent, not an employee of the home owner.
a. True
b. False
89. An auctioneer who sells goods is likely an agent and independent contractor.
a. True
b. False
90. If you hire a builder to build a home, he is likely an independent contractor for you.
a. True
b. False
91. An independent contractor is usually not an agent of the principal who hired her, but can have that role too.
a. True
b. False
92. One factor that courts may consider when trying to decide if an independent contract or employee relationship
exists is whether or not the contractor has the right to direct or control the work of the employer.
a. True
b. False
93. In France v. Southern Equipment, where a worker was seriously hurt on a roofing job, the courts held that the
owner of the building being roofed was liable for the injuries suffered by the worker.
a. True
b. False
94. In France v. Southern Equipment, where a worker was seriously hurt on a roofing job, the courts held that the
owner of the building being roofed was not responsible for the injury suffered by an employee of an independent
contractor doing the roof work.
a. True
b. False
95. Employment-at-will means that, unless a contract holds otherwise, employers are free to fire workers at any time
for any reason and employees are free to quit their jobs at any time for any reason.
a. True
b. False
96. Geary was fired by his supervisor for revealing to higher management a serious problem with a company product.
He sued for wrongful dismissal. You would expect the court to hold that Geary would be successful because he
proved that if the product had gone to market it could have cost many lives.
a. True
b. False
97. Geary was fired by his supervisor for revealing to higher management a serious problem with a company product.
He sued for wrongful dismissal. You would expect the court held that Geary's dismissal was proper under
employment-at-will despite his good motives.
a. True
b. False
98. If an American company sends an American employee to work in its office in France, the employee may be under
French employment law.
a. True
b. False
99. European nations generally have more detailed rules regarding employees than does the U.S.
a. True
b. False
100. Some state courts hold that employment contracts contain implied covenants of good faith and fair dealing.
a. True
b. False
101. An express contract for certain terms of employment can restrict employment at-will.
a. True
b. False
102. In Coelho v. Posi-Seal the Connecticut Supreme Court found that statements by the company president to an
employee that he had good job security, but later fired him, was a breach of implied contract for continued
employment.
a. True
b. False
103. In Guz v. Bechtel National, where Guz was fired after many years of good work at Bechtel, the California
supreme court held that his tenure at the company created a presumption that he could only be dismissed for good
cause.
a. True
b. False
104. In Guz v. Bechtel National, where Guz was fired after many years of good work at Bechtel, the California
supreme court held that his dismissal breached an implied contract to be terminated only for cause.
a. True
b. False
105. In Guz v. Bechtel National, where Guz was fired after many years of good work at Bechtel, the California
supreme court held that his tenure at the company did not affect the right of the company to dismiss him without
good cause.
a. True
b. False
106. In Foley v. Interactive Data, the California Supreme Court held that for an employer to ignore written termination
guidelines does not provide a basis for suing for breach of employment contract.
a. True
b. False
107. Many courts hold employee handbooks may create contractual obligations between employers and employees.
a. True
b. False
108. All employee handbooks are held to create binding contractual obligations on the part of employers who use them.
a. True
b. False
109. Employers may wish to state that employee handbooks are not binding contracts.
a. True
b. False
110. Federal law states that employers are not liable for actions of employees based on their use of social media in the
workplace.
a. True
b. False
111. An employer could be liable for sexual harassment by an employee using social media improperly in the workplace.
a. True
b. False
112. If an agent commits a tort outside the agent's scope of employment, the agent is liable to the third party for
damages incurred.
a. True
b. False
113. Principals are liable for all torts committed by their agents.
a. True
b. False
114. A principal held responsible for the torts of an agent is said to have vicarious liability.
a. True
b. False
115. An employer held responsible for the torts of an employee is said to have vicarious liability.
a. True
b. False
116. The rule of law imposing vicarious liability on an innocent principal for the torts of an agent is respondeat superior.
a. True
b. False
117. In Armstrong v. Food Lion, where employees at a grocery store beat two customers, the court held the store
liable under the theory of respondeat superior.
a. True
b. False
118. In Armstrong v. Food Lion, where employees at a grocery store beat two customers, the court held the store
liable under the rule of vicarious liability.
a. True
b. False
119. In Armstrong v. Food Lion, where employees at a grocery store beat two customers, the court held the store not
liable for the attack because it was outside the scope of employment.
a. True
b. False
120. An employer could be liable for acts of an employee based on negligent hiring.
a. True
b. False
121. An employer should be cautious about hiring persons with criminal backgrounds that mean they could pose a threat
to others as the employer could be liable for unauthorized torts that occurred on the job.
a. True
b. False
122. A company hired independent contractors to sell their products door-to-door. One sales rep, who had a criminal
history, assaulted a customer, who sued the parent company. You would expect the court to hold the company
liable for negligence.
a. True
b. False
123. A company hired independent contractors to sell their products door-to-door. One sales rep, who had a criminal
history, assaulted a customer, who sued the parent company. The company was not liable because the sales rep
was an independent contractor.
a. True
b. False
124. In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for
AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove
sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The
appeals court held that AFLAC was liable as it had given Galgano apparent authority to make the lease.
a. True
b. False
125. In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for
AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove
sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The
appeals court held that AFLAC was liable as it had given Galgano apparent authority to make the lease.
a. True
b. False
