Business Law Test 3

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  1. To determine whether a worker is an employee or an independent contractor, courts consider which of the following?

    a. The amount of control the employer exercises over the worker.
    b. Who supplies the tools that the worker uses.
    c. What degree of skill is required of the worker.
    d. All of the above
    d. All of the above
  2. To determine whether a worker is an employee or independent contractor, the IRS considers which factor of the most important?

    a. The amount of control the employee exercises over the worker?
    b. Who supplies the tools that the worker uses.
    c. What degree of skill is required of the worker.
    d. Whether the worker is engaged in an occupation or business distinct from that of the employer.
    a. The amount of control the employee exercises over the worker
  3. An agency relationship can arise in which of the following ways?

    a. Agreement of the parties
    b. Ratification
    c. Estoppel
    d. Operation of law
    e. All of the above
    e. All of the above
  4. True or False

    Agency is a fiduciary relationship.
    True
  5. True or False

    In an agency relationship, both the agent and the principle have a duty to act in good faith.
    True
  6. True or False

    A principle owes its agent a duty of loyalty and obedience.
    False
  7. True or False

    An agent may commingle the principle's funds with his own as long as the agent keeps detailed records to account for the principle funds.
    False
  8. True or False

    A gratuitous agent cannot be liable to his principle for a breach of contract.
    True
  9. Lee, a purchasing agent for Metcalf, receives cash rebates from a customer. The rebates belong to ______?

    a. the agent, Lee
    b. the principal, Metcalf
    c. the agent and the principal jointly
    b. the principal, Metcalf
  10. Forming an agency relationship requires that ______?

    a. the agreement between the principal and the agent be supported by consideration.
    b. the principal and the agent not be minors.
    c. both the principal and the agent consent to the agency.
    d. the agent's authority be limited to the express grant of authority in the agency agreement.
    c. both the principal and the agent consent to the agency.
  11. True or False

    If a principal breaches her duties to an agent, the principal could be liable to the agent under theories of breach of contract or tort.
    True
  12. True or False

    A principal has the right to terminate an agency relationship if the agent breaches his fiduciary duty to the principal.
    True
  13. Which of the following actions requires an agent for a corporation to have a written agency agreement?

    a. purchasing office supplies for the principal's business
    b. purchasing an interest in undeveloped land for  the principal
    c. hiring an independent contractor to renovate the principal's office building
    d. Retaining an attorney to collect a business debt owed to the principal.
    b. purchasing an interest in undeveloped land for  the principal
  14. Noll gives Carr a written power of attorney. Which of the following statements is true regarding this power of attorney?

    a. It must be signed by both Noll and Carr.
    b. It must be for a definite period of time.
    c. It may continue in existence after Noll's death.
    d. It may limit Carr's authority to specific transactions.
    d. It may limit Carr's authority to specific transactions. 
  15. Which of the following statements, if any, represents a principal's duty to an agent who works on a commission basis?

    I. The Principal is required to maintain pertinent records, account to the agent, and pay the agent according to the terms of the agreement.

    II. The principal is required to reimburse the agent for all authorized expenses incurred unless the agreement calls for the agent to pay expenses out of the commission.

    a. I only
    b. II only
    c. Both I & II
    d. Neither I or II
    c. Both I & II
  16. True or False

    An agent has the implied authority to do what is reasonably necessary to carry out express authority.
    True
  17. Generally, a disclosed principal will be liable to third parties for its agent's unauthorized misrepresentations if the agent is an _____.

    a. Employee (Yes) / Independent Contractor (Yes)
    b. Employee (Yes) / Independent Contractor (No)
    c. Employee (No) / Independent Contractor (Yes)
    d. Employee (No) / Independent Contractor (No)
    a. Employee (Yes) / Independent Contractor (Yes)
  18. An agent will usually be liable under a contract made with a third party when the agent is acting on behalf of a ______?

    a. Disclosed Principal (Yes) / Undisclosed Principal (Yes)
    b. Disclosed Principal (Yes) / Undisclosed Principal (No)
    c. Disclosed Principal (No) / Undisclosed Principal (Yes)
    d. Disclosed Principal (No) / Undisclosed Principal (No)
    c. Disclosed Principal (No) / Undisclosed Principal (Yes)
  19. Ace engages Butler to manage Ace's retail business. Butler has no implied authority to ______.

    a. Purchase inventory for Ace's business
    b. Sell Ace's business fixtures
    c. Pay Ace's business debts
    d. Hire or discharge Ace's business employees
    b. Sell Ace's business fixtures
  20. True or False

    Apparent authority may arise through a principal's pattern of conduct.
    True
  21. Which act, if committed by the agent, will cause a principle to be liable to a third party?

    a. A negligent act committed by an independent contractor in performance of the contract that results in injury to a third party.
    b. An intentional tort committed by an employee outside the scope of employment that results in the injury to a third party.
    c. An employee's failure to notify the employer of a dangerous condition that results in injury to a third party.
    d. A negligent act committed by an employee outside the scope of employment that results in injury to a third party.
    c. An employee's failure to notify the employer of a dangerous condition that results in injury to a third party.
  22. Neal ,an employee of Jordan, was delivering merchandise to a customer. On the way, Neal's negligence cause a traffic accident that resulted in the damages to a third party's automobile. Who is liable to the third party.

    a. Neal (No) / Jordan (No)
    b. Neal (Yes) / Jordan (Yes)
    c. Neal (Yes) / Jordan (No)
    d. Neal (No) / Jordan (Yes)
    b. Neal (Yes) / Jordan (Yes)
  23. Generally, a disclosed principal will ne liable om tort to third parties for its agent's unauthorized misrepresentations if the agent is an _____?

    a. Employee (Yes) / Independent Contractor (Yes)
    b. Employee (Yes) / Independent Contractor (No)
    c. Employee (No) / Independent Contractor (Yes)
    d. Employee (No) / Independent Contractor (No)
    a. Employee (Yes) / Independent Contractor (Yes)
  24. The apparent authority of a general agent for a disclosed principal will terminate without notice to third parties when the ____?

    a. principal dismisses the agent
    b. principal or agent dies
    c. purpose of the agency relationship has been fulfilled
    d. time period set forth in the agency agreement has expired
    b. principal or agent dies
  25. True or False

    An undisclosed principal is generally bound to perform a contract with a third party just as if the principal had been fully disclosed at the time the contract was made.
    True
  26. Pell is the principal and Astor is the agent in an agency coupled with an interest. In the absence of a contractual provision relating to the duration of the agency, who had the right to terminate the agency before the interest has expired.

    a. Pell (Yes) / Astor (Yes)
    b. Pell (No) / Astor (Yes)
    c. Pell (No) / Astor (No)
    d. Pell (Yes) / Astor (No)
    b. Pell (No) / Astor (Yes)
  27. Bell Corp. dismissed Ace as its general sales agent and notified all of Ace's Known customers by letter. Young Corp., a retail outlet located outside of Ace's previously assigned sale territory, had never dealt with Ace. Young knew of Ace as a result of various business contacts. After his dismissal, Ace sold Young goods to be delivered by Bolt and received from Young a cash deposit for 20% of the purchase price. It was not unusual for an agent in Ace's previous position to receive cash deposits. In an action by Young against Bolt on the sale contract, Young will ____?

    a. lose b/c Ace lacked any implied authority to make the contract
    b. lose b/c Ave lacked any express authority to make the contract
    c. win b/c Bolt's notice was inadequate to terminate Ace's apparent authority
    d. win because a principal is an insurer of an agent's acts.


    c. win b/c Bolt's notice was inadequate to terminate Ace's apparent authority
  28. The legal doctrine by which an employer may be liable for the torts of an employee is called ____?

    A. res judicata
    B. respondeat superior
    C. res ipsa loquitur
    B. respondeat superior
    (this multiple choice question has been scrambled)
  29. True or False

    If an employee takes off work early and gets into a car accident on her way home, her employer would generally have no liability to a third party because the accident occurred outside the scope of employment.
    True
  30. True or False

    A principal can never be liable for the crimes of an agent.
    False
  31. Cobb, Inc., a partner in TLC Partnership, assigns its partnership interest to Bean, who is not made a partner. After the assignment, Bean may assert the right to

    I. Participation in the management of TLC.
    II. Cobb's share of TLC's partnership profits.

    a. I only
    b. II only
    c. Both I and II
    d. Neither I nor II
    b. II only
  32. Under the Uniform Partnership Act, which of the following statements, if any, is/are correct regarding the effect of the assignment of an interest in a general partnership.

    I. The assignee is personally responsible for the assigning partner's share of the past and future partnership debts.

    II. The assignee is entitled to the assigning partner's interest in partnership profits and surplus on dissolution of the partnership.

    a. I only
    b. II only
    c. Both I and II
    d. Neither I nor II
    b. II only
  33. Dawn was properly admitted as a partner in the ABC Partnership after purchasing Jim's partnership interest. Jim immediately withdrew. The partnership agreement states that the partnership will continue on the withdrawal or admission of a partner. Unless the partners otherwise agree, _____.

    a. Dawn's personal liability for existing partnership debts will be limited to Dawn's interest in partnership property.
    b. Jim will automatically be released from personal liability for partnership debts incurred before Dawn's admission.
    c. Jim will permitted to recover from the other partners the full amount that Jim paid on account of partnership debts incurred before Dawn's admission.
    d. Dawn will be subjected to unlimited personal liability.
    a. Dawn's personal liability for existing partnership debts will be limited to Dawn's interest in partnership property.
  34. True or False

    Any partnership can be dissolved by the partners' mutual agreement.
    True
  35. True or False

    Under the Uniform Partnership Act, a partner is entitled to compensation for services in winding up the partnership affairs, above and apart from his or her share in the partnership profits.
    True

Card Set Information

Author:
JSmith1129
ID:
325769
Filename:
Business Law Test 3
Updated:
2016-11-22 04:41:41
Tags:
Mutiple Choice Quizzes
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Description:
Flash Cards for Business Law 3 Test
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