BA 242 Final Exam 2026 Questions and
Answers Graded A+
Agent - Correct answer-Creates a fiduciary relationship
Express Agency - Correct answer-An agency relationship created by oral or written
agreement between principal and the agent
Implied Agency - Correct answer-An agency that occurs when a principal and an
agent do not expressly create an agency, but it is inferred from the conduct of the
parties
Apparent Agency - Correct answer-Agency that arises when a principal creates the
appearance of an agency that in actuality does not exist
Agency by Ratification - Correct answer-Agency that consists of no contact
between agent and principal; person acts as an agent but isn't authorized to
Employer Independent Contract - Correct answer-Employer is not responsible for a
contractor's actions
Classification of Principal - Correct answer-Must be classified as either disclosed,
partially disclosed, or undisclosed
©COPYRIGHT 2026, ALL RIGHTS RESERVED 1
,Respondeat Superior - Correct answer-Employer is liable because they negligently
hired an agent
Agent Misrepresentation - Correct answer-Principle could be tortiously reliable
Termination of Acts of Parties - Correct answer-Lapse of time, mutual agreement
of the parties, revocation of authority, renunciation by the agent
Termination by Operation of Law - Correct answer-Death or insanity,
impossibility, changed circumstances, bankruptcy, war
Sole Proprietorship - Correct answer-A business owned by one person, fewer legal
formalities, easy to create, full personal liability, limited funding, limited life, and
single taxation
Partnership - Correct answer-A business owned by two or more people, less profit,
easy to create, full personal liability, limited life
LLC / LLP - Correct answer-Business entity with limited liability, single taxation,
and no personal liability but is harder to create
S-Corp - Correct answer-Small corporation with less than 100 shareholders, avoids
double taxation with limited freedom, limited liability, and taxes on profits
C-Corp - Correct answer-Corporation with double taxation, unlimited shareholders,
limited liability, and unlimited transfer
©COPYRIGHT 2026, ALL RIGHTS RESERVED 2
, Uniform Partnership Act - Correct answer-United States legislation that serves as a
guide for legally formulating a general partnership agreement
Partnership as a Legal Entity - Correct answer-An organization having a legal
existence separate from that of its members
Partnership by Estoppel - Correct answer-A judicially created partnership that may,
at the court's discretion, be imposed for purposes of fairness
Actual Authority of Partners - Correct answer-Powers stated in a partnership
agreement
Implied Authority of Partners - Correct answer-Powers that aren't explicitly stated
in partnership agreement but are assumed
Wrongful Dissolution - Correct answer-A situation in which a partner withdraws
from a partnership without having the right to do so at that time
Dissolution of a Partnership - Correct answer-Change in relation of partners by
elimination of one
Buy/Sell Agreement - Correct answer-A legal contract that determines what will be
done with a business in the event that an owner dies or becomes disabled
Limited Partnership - Correct answer-A partnership consisting of a general partner
and corporation; protection from lawsuits but share profits
©COPYRIGHT 2026, ALL RIGHTS RESERVED 3
Answers Graded A+
Agent - Correct answer-Creates a fiduciary relationship
Express Agency - Correct answer-An agency relationship created by oral or written
agreement between principal and the agent
Implied Agency - Correct answer-An agency that occurs when a principal and an
agent do not expressly create an agency, but it is inferred from the conduct of the
parties
Apparent Agency - Correct answer-Agency that arises when a principal creates the
appearance of an agency that in actuality does not exist
Agency by Ratification - Correct answer-Agency that consists of no contact
between agent and principal; person acts as an agent but isn't authorized to
Employer Independent Contract - Correct answer-Employer is not responsible for a
contractor's actions
Classification of Principal - Correct answer-Must be classified as either disclosed,
partially disclosed, or undisclosed
©COPYRIGHT 2026, ALL RIGHTS RESERVED 1
,Respondeat Superior - Correct answer-Employer is liable because they negligently
hired an agent
Agent Misrepresentation - Correct answer-Principle could be tortiously reliable
Termination of Acts of Parties - Correct answer-Lapse of time, mutual agreement
of the parties, revocation of authority, renunciation by the agent
Termination by Operation of Law - Correct answer-Death or insanity,
impossibility, changed circumstances, bankruptcy, war
Sole Proprietorship - Correct answer-A business owned by one person, fewer legal
formalities, easy to create, full personal liability, limited funding, limited life, and
single taxation
Partnership - Correct answer-A business owned by two or more people, less profit,
easy to create, full personal liability, limited life
LLC / LLP - Correct answer-Business entity with limited liability, single taxation,
and no personal liability but is harder to create
S-Corp - Correct answer-Small corporation with less than 100 shareholders, avoids
double taxation with limited freedom, limited liability, and taxes on profits
C-Corp - Correct answer-Corporation with double taxation, unlimited shareholders,
limited liability, and unlimited transfer
©COPYRIGHT 2026, ALL RIGHTS RESERVED 2
, Uniform Partnership Act - Correct answer-United States legislation that serves as a
guide for legally formulating a general partnership agreement
Partnership as a Legal Entity - Correct answer-An organization having a legal
existence separate from that of its members
Partnership by Estoppel - Correct answer-A judicially created partnership that may,
at the court's discretion, be imposed for purposes of fairness
Actual Authority of Partners - Correct answer-Powers stated in a partnership
agreement
Implied Authority of Partners - Correct answer-Powers that aren't explicitly stated
in partnership agreement but are assumed
Wrongful Dissolution - Correct answer-A situation in which a partner withdraws
from a partnership without having the right to do so at that time
Dissolution of a Partnership - Correct answer-Change in relation of partners by
elimination of one
Buy/Sell Agreement - Correct answer-A legal contract that determines what will be
done with a business in the event that an owner dies or becomes disabled
Limited Partnership - Correct answer-A partnership consisting of a general partner
and corporation; protection from lawsuits but share profits
©COPYRIGHT 2026, ALL RIGHTS RESERVED 3
