Business Law - Final Exam
How is consent established in an agency relationship?
1) The principal must ask the agent to do something and the agent must agree.
2) The principal gives consideration to the agent.
3) The principal and agent must have a written, notarized agreement.
4) All of these are correct. -ANSW- 1) The principal must ask the agent to do something
and the agent must agree.
As a general rule, an agent is liable on contracts entered into on behalf of a fully
disclosed principal.
1) True
2) False -ANSW- 2) False
Kaiya is a sales representative of TriColor. Kaiya owes a fiduciary duty to TriColor.
1) True
2) False -ANSW- 1) True
When a principal is unidentified
1) the agent and principal will be jointly and severally liable on the contract.
2) the agent and principal will be only jointly liable on the contract.
3) only the principal can be liable.
4) only the agent is liable. -ANSW- 1) the agent and principal will be jointly and
severally liable on the contract.
An agent may not engage in inappropriate behavior that reflects badly on the principal.
This rule applies to conduct
1) during working hours.
2) during off-duty time.
3) during both working hours and off-duty time.
4) only by public officials. -ANSW- 3) during both working hours and off-duty time.
Chance is a traveling marketing representative for a publishing company. He is an
independent contractor and was hired without negligence. One afternoon while driving
to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is
injured. Judy can
, 1) hold both Chance and his company liable for her injury.
2) hold the company but not Chance liable.
3) hold Chance but not the company liable.
4) not hold Chance or his company liable for her injury. -ANSW- 3) hold Chance but not
the company liable.
Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to
Rob.
1) True
2) False -ANSW- 2) False
John hired Tim to sell his house. Which statement is correct?
1) John is Tim's principal.
2) Tim, but not John, can terminate the agency relationship.
3) John, but not Tim, can terminate the agency relationship.
4) Tim is John's principal. -ANSW- 1) John is Tim's principal.
If apparent authority is present, the principal is liable for even the unauthorized acts of
the agent.
1) True
2) False -ANSW- 1) True
Pamela hired Lena to sell her business. Lena
1) can buy the business as long as the price is fair.
2) can buy the business as long as she qualifies for financing.
3) can buy the business only with Pamela's permission.
4) cannot buy the business under any circumstances. -ANSW- 3) can buy the business
only with Pamela's permission.
Mohammad was an employee in the new product development department of Estay Inc.
Mohammad was directly involved in the development of a new product that Estay
intended to launch in 6 months. Estay took great care to keep information concerning
the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to
leave Estay to direct Ceries' marketing department. Which statement is correct?
1) Mohammad can share with Ceries the confidential information he knows about
Estay's new product because he was directly involved in its development.
2) Mohammad can share with Ceries the confidential information he knows about
Estay's new product because his agency relationship with Estay is terminated.
3) Mohammad cannot share with Ceries the confidential information he knows about
Estay's new product because of the equal dignities rule.
How is consent established in an agency relationship?
1) The principal must ask the agent to do something and the agent must agree.
2) The principal gives consideration to the agent.
3) The principal and agent must have a written, notarized agreement.
4) All of these are correct. -ANSW- 1) The principal must ask the agent to do something
and the agent must agree.
As a general rule, an agent is liable on contracts entered into on behalf of a fully
disclosed principal.
1) True
2) False -ANSW- 2) False
Kaiya is a sales representative of TriColor. Kaiya owes a fiduciary duty to TriColor.
1) True
2) False -ANSW- 1) True
When a principal is unidentified
1) the agent and principal will be jointly and severally liable on the contract.
2) the agent and principal will be only jointly liable on the contract.
3) only the principal can be liable.
4) only the agent is liable. -ANSW- 1) the agent and principal will be jointly and
severally liable on the contract.
An agent may not engage in inappropriate behavior that reflects badly on the principal.
This rule applies to conduct
1) during working hours.
2) during off-duty time.
3) during both working hours and off-duty time.
4) only by public officials. -ANSW- 3) during both working hours and off-duty time.
Chance is a traveling marketing representative for a publishing company. He is an
independent contractor and was hired without negligence. One afternoon while driving
to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is
injured. Judy can
, 1) hold both Chance and his company liable for her injury.
2) hold the company but not Chance liable.
3) hold Chance but not the company liable.
4) not hold Chance or his company liable for her injury. -ANSW- 3) hold Chance but not
the company liable.
Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to
Rob.
1) True
2) False -ANSW- 2) False
John hired Tim to sell his house. Which statement is correct?
1) John is Tim's principal.
2) Tim, but not John, can terminate the agency relationship.
3) John, but not Tim, can terminate the agency relationship.
4) Tim is John's principal. -ANSW- 1) John is Tim's principal.
If apparent authority is present, the principal is liable for even the unauthorized acts of
the agent.
1) True
2) False -ANSW- 1) True
Pamela hired Lena to sell her business. Lena
1) can buy the business as long as the price is fair.
2) can buy the business as long as she qualifies for financing.
3) can buy the business only with Pamela's permission.
4) cannot buy the business under any circumstances. -ANSW- 3) can buy the business
only with Pamela's permission.
Mohammad was an employee in the new product development department of Estay Inc.
Mohammad was directly involved in the development of a new product that Estay
intended to launch in 6 months. Estay took great care to keep information concerning
the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to
leave Estay to direct Ceries' marketing department. Which statement is correct?
1) Mohammad can share with Ceries the confidential information he knows about
Estay's new product because he was directly involved in its development.
2) Mohammad can share with Ceries the confidential information he knows about
Estay's new product because his agency relationship with Estay is terminated.
3) Mohammad cannot share with Ceries the confidential information he knows about
Estay's new product because of the equal dignities rule.
