Agency Law & Business Organizations Exam
Answers | Comprehensive Review of Agency,
Partnerships, LLCs, and Corporations Latest
Update
What is agency law concerned with?
✓ Agency law is concerned with your responsibility for the actions of others and their
obligations to you.
What is a principal in an agency relationship?
✓ A principal is a person who has someone else acting for him.
What is an agent in an agency relationship?
✓ An agent is a person who acts for someone else.
What are the requirements to create an agency relationship?
✓ There must be a principal and an agent who mutually consent that the agent will act on
behalf of the principal and be subject to the principal's control.
What is a fiduciary relationship?
✓ A fiduciary relationship is one of trust where you treat the other party better than you would
treat yourself.
, Is a contract needed to create an agency relationship?
✓ No contract is needed; it is more of a favor.
What is the Equal Dignities Rule?
✓ According to the Equal Dignities Rule, if an agent is empowered to enter into a contract that
must be in writing, then the appointment of the agent must also be in writing.
What is the duty of loyalty in an agency relationship?
✓ An agent has a fiduciary duty to act loyally for the principal's benefit in all matters connected
with the agency relationship.
What must an agent do regarding outside profits?
✓ An agent cannot receive profits unless the principal knows and approves of it.
What is the duty of confidentiality for agents?
✓ Agents can neither disclose nor use for their own benefit any confidential information they
acquire during their agency.
What happens to the duty of confidentiality after the agency terminates?
✓ The duty to not disclose information does not terminate when the agency ends.
Answers | Comprehensive Review of Agency,
Partnerships, LLCs, and Corporations Latest
Update
What is agency law concerned with?
✓ Agency law is concerned with your responsibility for the actions of others and their
obligations to you.
What is a principal in an agency relationship?
✓ A principal is a person who has someone else acting for him.
What is an agent in an agency relationship?
✓ An agent is a person who acts for someone else.
What are the requirements to create an agency relationship?
✓ There must be a principal and an agent who mutually consent that the agent will act on
behalf of the principal and be subject to the principal's control.
What is a fiduciary relationship?
✓ A fiduciary relationship is one of trust where you treat the other party better than you would
treat yourself.
, Is a contract needed to create an agency relationship?
✓ No contract is needed; it is more of a favor.
What is the Equal Dignities Rule?
✓ According to the Equal Dignities Rule, if an agent is empowered to enter into a contract that
must be in writing, then the appointment of the agent must also be in writing.
What is the duty of loyalty in an agency relationship?
✓ An agent has a fiduciary duty to act loyally for the principal's benefit in all matters connected
with the agency relationship.
What must an agent do regarding outside profits?
✓ An agent cannot receive profits unless the principal knows and approves of it.
What is the duty of confidentiality for agents?
✓ Agents can neither disclose nor use for their own benefit any confidential information they
acquire during their agency.
What happens to the duty of confidentiality after the agency terminates?
✓ The duty to not disclose information does not terminate when the agency ends.
