BUS340 Bedford Ch 17

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emach532
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BUS340 Bedford Ch 17
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2013-07-30 18:32:26
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BUS340 Bedford 17
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  1. 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.
  2. 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
  3. A power of attorney is a written document.

    True

    False
    True
  4. An agency relationship may be created for any legal purpose.

    True

    False
    True
  5. 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
  6. Express authority is authority declared in clear, direct, definite terms.

    True

    False
    True
  7. 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.
  8. A fiduciary relationship allows parties to avoid obligations without liability.

    True

    False
    False
  9. 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
  10. 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
  11. An agency relationship can be formed without consideration.

    True

    False
    True
  12. 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.
  13. 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.
  14. A corporate officer is not an agent for the corporation.

    True

    False
    False
  15. 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.
  16. An agency relationship may not occur by operation of law in a family.

    True

    False
    False
  17. 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
  18. 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.
  19. 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
  20. Employees who deal with third parties are agents of their employers.

    True

    False
    True
  21. An agency relationship cannot exist in the absence of a formal agreement.

    True

    False
    False
  22. A licensed professional can employ an unlicensed agent to perform pro­fessional actions.

    True

    False
    False
  23. 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
  24. 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
  25. Before a principal can ratify a contract, the principal must know all of the material facts involved in the deal.

    True

    False
    True
  26. For an agent’s implied authority to be effective, a principal must confirm it in writing.

    True

    False
    False
  27. 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
  28. 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
  29. If a principal does not ratify an authorized contract, the prin­cipal is not bound.

    True

    False
    False
  30. 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

    a. an agent.

    b. an independent contractor.

    c. a principal.

    d. a work for hire.
    a. an agent

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