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Exam 16: Agency

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Question 31

Multiple Choice

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Picabo drives a truck as an employee for Quik Delivery,Inc.Picabo would most likely be considered acting outside the scope of her employment if she

A) crashed into a car at the airport while off duty.
B) hit a pedestrian in a parking lot during a "working" lunch.
C) ran over an attendant at a gas station while refueling the truck.
D) smashed into a store-front while intoxicated on-duty.

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Question 32

Multiple Choice

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Sela agrees to act on Thom's behalf,subject to Thom's control,and Thom trusts Sela to so act.They set out the terms in a written document,which they both sign.This is

A) an agency by agreement.
B) an agency by estoppel.
C) an agency by ratification.
D) not the creation of an agency relationship.

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Question 33

True/False

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An agency relationship cannot exist in the absence of a formal agreement.

Sonia manages a Tasty Pastry store for United Food Company.To manage the business,Sonia's authority can be implied by

A principal who causes a third person to believe that another person is the principal's agent can be estopped from denying the agency relationship.

A principal is not liable to a third party for any contract made by the agent acting outside the scope of his or her authority.

Frida hires Gert,a real estate broker,to act as her agent to sell her house.The house burns down before being sold.The agency agreement is likely

Lather Up Soap Products Company grants its agent Kathy an exclusive territory in which to sell Lather Up products.The firm cannot compete with Kathy in that territory under the principal's duty of

If a principal does not ratify an authorized contract,the principal is not bound.

Oscar is Precise Service Company's chief executive officer.On Precise's behalf,Oscar solicits business,hires and fires workers,and handles the finances.Precise pays Oscar varying amounts,depending on his "needs." Oscar is most likely

Without authorization,Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house.Sari ratifies the contract.Later,Sari tries to rescind the part of the contract relating to the exterior.This attempt will be

Ozzy is an officer of Prudent Financial Corporation.Ozzy serves in a representative capacity for Prudent Financial's owners.With respect to binding Prudent Financial to contracts,Ozzy is

Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial transactions on Miklos's behalf.This power will terminate on

Cory employs Daily Delivery Agency as an agent under a written agreement that describes the rights and duties of both parties.This is

A principal owes an agent a duty of accounting.

A power of attorney can be given only to an actual attorney.

An agency can terminate once its purpose is achieved.

If a principal does not ratify an unauthorized contract,the principal is not bound.

Trey,an agent for Uno Music Corporation,executes an unauthorized contract with Variety Recording,Inc.,that is highly advantageous to Uno.Variety withdraws from the deal before Uno ratifies the contract.The contract is

Rita is appointed as an agent for Superior Sales,Inc.The agency agreement is silent as to the level of sales that Rita is expected to achieve.She must