Chapter 8 – Agency Formation and Duties
Quiz Part II
AGENCY LEARNING OBJECTIVES
1. Describe the legal relationship between agents and principals.
2. Determine the liability of principals and agents for contracts, torts, and crimes in a given scenario.
3. Explain the different types of authority an agent can have.
4. Identify the rights and duties of agents.
5. Identify the rights and duties of principals.
6. Identify the ways in which agency relationships can be formed and terminated.
1. California Produce Company hires Drew to work on California Produce’s shipping dock, checking
outgoing loads and dispatching the company’s drivers. With respect to California Produce, Drew is most
likely
a. an agent.
b. an independent contractor.
c. a principal.
d. a work for hire.
2. Donato is Equipment Repair Service Company’s chief executive officer. On Equipment Repair’s behalf,
Donato solicits business, hires and fires workers, and handles finances. Equipment Repair pays Donato
varying amounts, depending on his “needs.” Donato is most likely
a. a principal.
b. an employee.
c. an employer.
d. an independent contractor.
3. Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the
athletes’ behalf. Sybil is
a. an agent.
b. an employee.
c. an employer.
d. a principal.
4. Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites,
as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity,
Rosario is
a. an agent.
b. an employee.
c. an independent contractor.
d. a principal.
,5. Lucille is married to Marcus. Lucille buys food for their children’s lunches and charges the cost to Marcus’s
account. This is
a. an agency by operation of law.
b. an agency by estoppel.
c. an agency by ratification.
d. not an agency relationship.
6. Bernard is an expert on exotic flowers. Custom Floral Arrangements, Inc., hires Bernard to order exotic
flowers for its arrangements. Bernard does not examine the quality of the flowers he orders on behalf of
Custom Floral. Bernard has breached
a. the duty of performance.
b. the duty of loyalty.
c. no duty.
d. the duty of notification.
7. Home Enterprises employs Itzak to buy property for a possible residential development. Itzak secretly buys
some of the property and sells it to Home Enterprises at a profit. Itzak has breached
a. no duty.
b. the duty of accounting.
c. the duty of loyalty.
d. the duty of notification.
8. Bailey is an agent for Culinary Delites Company. In the course of Bailey’s performance for Culinary
Delites, she pays Drivers’ Repair Service for certain vehicle maintenance and repair work. Bailey’s right to
obtain the amount of the payments from Culinary Delites arises under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
9. Rondi holds herself out as possessing special accounting skills. As an agent, she must exercise the degree of
skill or care expected of
a. a person having those skills.
b. an average, unskilled person.
c. a reasonable person.
d. the principal.
10. Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales’s right not to perform a
contract entered into by Jeremy, if he breaches their agency agreement, is the right of
a. avoidance.
b. indemnification.
c. nullification.
, d. termination.
Quiz Part II
AGENCY LEARNING OBJECTIVES
1. Describe the legal relationship between agents and principals.
2. Determine the liability of principals and agents for contracts, torts, and crimes in a given scenario.
3. Explain the different types of authority an agent can have.
4. Identify the rights and duties of agents.
5. Identify the rights and duties of principals.
6. Identify the ways in which agency relationships can be formed and terminated.
1. California Produce Company hires Drew to work on California Produce’s shipping dock, checking
outgoing loads and dispatching the company’s drivers. With respect to California Produce, Drew is most
likely
a. an agent.
b. an independent contractor.
c. a principal.
d. a work for hire.
2. Donato is Equipment Repair Service Company’s chief executive officer. On Equipment Repair’s behalf,
Donato solicits business, hires and fires workers, and handles finances. Equipment Repair pays Donato
varying amounts, depending on his “needs.” Donato is most likely
a. a principal.
b. an employee.
c. an employer.
d. an independent contractor.
3. Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the
athletes’ behalf. Sybil is
a. an agent.
b. an employee.
c. an employer.
d. a principal.
4. Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites,
as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity,
Rosario is
a. an agent.
b. an employee.
c. an independent contractor.
d. a principal.
,5. Lucille is married to Marcus. Lucille buys food for their children’s lunches and charges the cost to Marcus’s
account. This is
a. an agency by operation of law.
b. an agency by estoppel.
c. an agency by ratification.
d. not an agency relationship.
6. Bernard is an expert on exotic flowers. Custom Floral Arrangements, Inc., hires Bernard to order exotic
flowers for its arrangements. Bernard does not examine the quality of the flowers he orders on behalf of
Custom Floral. Bernard has breached
a. the duty of performance.
b. the duty of loyalty.
c. no duty.
d. the duty of notification.
7. Home Enterprises employs Itzak to buy property for a possible residential development. Itzak secretly buys
some of the property and sells it to Home Enterprises at a profit. Itzak has breached
a. no duty.
b. the duty of accounting.
c. the duty of loyalty.
d. the duty of notification.
8. Bailey is an agent for Culinary Delites Company. In the course of Bailey’s performance for Culinary
Delites, she pays Drivers’ Repair Service for certain vehicle maintenance and repair work. Bailey’s right to
obtain the amount of the payments from Culinary Delites arises under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
9. Rondi holds herself out as possessing special accounting skills. As an agent, she must exercise the degree of
skill or care expected of
a. a person having those skills.
b. an average, unskilled person.
c. a reasonable person.
d. the principal.
10. Insurance Sales Corporation hires Jeremy to act as its agent. Insurance Sales’s right not to perform a
contract entered into by Jeremy, if he breaches their agency agreement, is the right of
a. avoidance.
b. indemnification.
c. nullification.
, d. termination.
