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Exam 14: Agency Relationships

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Question 31

Multiple Choice

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Rosa introduces Sal to her friend Trey as "my associate." Sal purports to act as Rosa's agent in a business transaction with Trey.If Rosa is liable for Sal's actions,it will be because their relationship is

A) an agency by agreement.
B) an agency by estoppel.
C) an agency by operation of law.
D) not an agency relationship.

E) B) and D)
F) None of the above

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Question 32

True/False

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When an agent's acts create the appearance of an agency that does not in fact exist,the principal is estopped to deny the agency relationship.

A) True
B) False

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Question 33

True/False

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The greater the employer's control over the work,the more likely it is that the worker is an employee.

Suva is an agent for Tax Accountants,Inc.On the firm's behalf and at its request,Suva pays Uzo for specially coded software.Suva's right to obtain the amount of the payment from Tax Accountants arises under the duty of

Bey indicates that he is acting as an agent on behalf of an unidentified client-Cuisine LLC-when he enters into a contract with Diners Bistro.Cuisine is

Curly Fries Inc.grants its agent Dian an exclusive territory in which to sell its products.The company cannot compete with Dian in that territory under the duty of

The principal is bound by the agent's unauthorized act,unless the principal negates it.

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts.

Watercraft Inc.employs Vern as a sales agent for a trial period.At the end of the period,Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made.Vern may demand

Any person can be an agent,regardless of whether he or she has the capacity to contract.

Denny,a certified public accountant and an investor,and Ethel,an insurance salesperson and a realtor,may create an agency relationship for

An independent contractor is,by definition,an employee because the person's physical conduct is controlled,or subject to control,by the employer.

Orin works at Pumps Inc.He works in the company's engineering department,interacting with third parties only to discuss technical issues.With respect to third parties,Orin is

Clark hires Dell,a real estate broker,to sell his beach house.The house is destroyed in a storm before it can be sold.Dell is Clark's agent

Lucy is married to Marco.Lucy buys food for their children's lunches and charges the cost to Marco's account.This is an agency by

In some situations,the courts find an agency relationship where there is no formal agreement.

Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act.

Luis hires Mieko to act as his agent to buy Ngoc's Southeast Asian Café.Luis tells Mieko to reveal only that she is buying the restaurant on behalf of a third party,without telling Ngoc's seller who that third party is.Luis is

Actual authority in an agency relationship arises from what a principal makes clear to a third party.

Once the agency relationship between a principal and an agent has ended,the agent loses the right to bind the principal.