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Agency
Agency MCQs
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Noll gives Carr a written power of attorney. Which of the following statements is correct regarding this power of attorney?
It must be signed by both Noll and Carr.
It must be for a definite period of time.
It may continue in existence after Noll’s death.
It may limit Carr’s authority to specific transactions.
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A principal and agent relationship requires a
Written agreement.
Power of attorney.
Meeting of the minds and consent to act.
Specified consideration.
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Lee repairs high-speed looms for Sew Corp., a clothing manufacturer. Which of the following circumstances best indicates that Lee is an employee of ...
Lee’s work is not supervised by Sew personnel.
Lee’s tools are owned by Lee.
Lee is paid weekly by Sew.
Lee’s work requires a high degree of technical skill.
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Generally, a disclosed principal will be liable to third parties for its agent’s unauthorized misrepresentations if the agent is an Employee ...
Yes Yes
Yes No
No Yes
No No
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Which of the following terms best describes the relationship between a corporation and the CPA it hires to audit corporate books?
Employer and employee.
Employer and independent contractor.
Master and servant.
Employer and principal.
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Harris, while delivering parts to a customer for his employer, negligently ran into and injured Wolfe. Harris had been asked by his employer to make...
Wolfe can hold Harris liable but not the employer because Harris was driving his own vehicle
Wolfe can hold the employer liable but not Harris because the employer had asked Harris to make the deliveries.
Wolfe can hold either Harris or the employer or both liable.
Wolfe can hold either Harris or the employer liable but not both.
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Chiron employed Sherwin as a mechanic. Chiron has various rules that all employed mechanics must follow. One day a customer was injured severely whe...
Sherwin is liable to the customer but Chiron is not because the accident was caused by Sherwin breaking one of Chiron’s specific rules.
The customer should sue Sherwin for fraud, not negligence, because Sherwin broke a rule of the employer.
The customer can hold Chiron liable but not Sherwin, because her contract to get the car repaired was with Chiron.
The customer may choose to recover damages from both Chiron and Sherwin.
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Pine, an employee of Global Messenger Co., was hired to deliver highly secret corporate documents for Global’s clients throughout the world. ...
Global discovered that Pine carried a weapon and did nothing about it.
Global instructed its messengers not to carry weapons.
Pine was correct and an attempt was being made to steal the package.
Pine’s weapon was unlicensed and illegal.
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When an agent acts for an undisclosed principal, the principal will not be liable to third parties if the
Principal ratifies a contract entered into by the agent.
Agent acts within an implied grant of authority.
Agent acts outside the grant of actual authority.
Principal seeks to conceal the agency relationship.
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Trent was retained, in writing, to act as Post’s agent for the sale of Post’s memorabilia collection. Which of the following statement...
I only.
II only.
Both I and II.
Neither I nor II.
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Blue, a used car dealer, appointed Gage as an agent to sell Blue’s cars. Gage was authorized by Blue to appoint subagents to assist in the sa...
Gage only.
Blue only.
Both Blue and Gage.
Neither Blue nor Gage.
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Blue, a used car dealer, appointed Gage as an agent to sell Blue’s cars. Gage was authorized by Blue to appoint subagents to assist in the sa...
Gage only.
Blue only.
Both Blue and Gage.
Neither Blue nor Gage.
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Which of the following under agency law is not a type of authority that an agent might have?
Actual express.
Actual implied.
Resulting.
Apparent
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Which of the following actions requires an agent for a corporation to have a written agency agreement?
Purchasing office supplies for the principal’s business.
Purchasing an interest in undeveloped land for the principal.
Hiring an independent general contractor to renovate the principal’s office building.
Retaining an attorney to collect a business debt owed the principal.
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Frost’s accountant and business manager has the authority to
Mortgage Frost’s business property.
Obtain bank loans for Frost.
Insure Frost’s property against fire loss.
Sell Frost’s business.
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Ames, claiming to be an agent of Clar Corporation, makes a contract with Trimon in the name of Clar Corporation. Later, Clar Corporation, for the fi...
Clar Corporation may ratify this contract if it does so with the entire contract.
Trimon may withdraw from the contract before Clar attempts to ratify it.
Clar Corporation may ratify this contract by performing under the contract without stating that it is ratifying.
Trimon may enforce this contract even if Clar Corporation does not wish to be bound.
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Beele authorized McDonald to be his agent to go to Denver and purchase some real estate that would be suitable to open up a branch office for BeeleÃ...
There is a fully enforceable contract between Beele and York for $140,000.
Beele may enforce the contract with York for $125,000.
There is no contract between Beele and York because McDonald did not have authority to purchase the real estate for $140,000.
York may require that Beele pay $140,000 because the real estate was worth $140,000 not $125,000.
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Young Corp. hired Wilson as a sales representative for six months at a salary of $5,000 per month plus 6% of sales. Which of the following statement...
Young does not have the power to dismiss Wilson during the six-month period without cause.
Wilson is obligated to act solely in Young’s interest in matters concerning Young’s business.
The agreement between Young and Wilson is not enforceable unless it is in writing and signed by Wilson.
The agreement between Young and Wilson formed an agency coupled with an interest.
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Which of the following statement(s) concerning agency law is (are) true? I. A contract is needed to have an agency relationship. II. The agent owes...
I and II only.
I and III only
II only
I, II, and III.
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Easy Corp. is a real estate developer and regularly engages real estate brokers to act on its behalf in acquiring parcels of land. The brokers are a...
The broker will have the same actual authority as if Easy’s identity has been disclosed.
Easy will be bound by the contract because of the broker’s apparent authority.
Easy will not be liable for any negligent acts committed by the broker while acting on Easy’s behalf.
The broker will not be personally bound by the contract because the broker has express authority to act.
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Which of the following rights will a third party be entitled to after validly contracting with an agent representing an undisclosed principal?
Disclosure of the principal by the agent.
Ratification of the contract by the principal.
Performance of the contract by the agent.
Election to void the contract after disclosure of the principal.
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Able, as agent for Baker, an undisclosed principal, contracted with Safe to purchase an antique car. In payment, Able issued his personal check to S...
Baker individually on the contract.
Able individually on the contract.
Baker individually on the check.
Able individually on the check.
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Thorp was a purchasing agent for Ogden, a sole proprietor, and had the express authority to place purchase orders with Ogden’s suppliers. Tho...
Ogden will be liable because Datz was not informed of Ogden’s incapacity.
Ogden will be liable because Thorp acted with express authority.
Ogden will not be liable because Thorp’s agency ended when Ogden was declared incompetent.
Ogden will not be liable because Ogden was a nondisclosed principal.
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Generally, an agency relationship is terminated by operation of law in all of the following situations except the
Principal’s death.
Principal’s incapacity.
Agent’s renunciation of the agency.
Agent’s failure to acquire a necessary business license.
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Bolt Corp. dismissed Ace as its general sales agent and notified all of Ace’s known customers by letter. Young Corp., a retail outlet located...
Lose, because Ace lacked any implied authority to make the contract.
Lose, because Ace lacked any express authority to make the contract.
Win, because Bolt’s notice was inadequate to terminate Ace’s apparent authority.
Win, because a principal is an insurer of an agent’s acts.
