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Exam 14: Agency Relationships

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Question 41

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In an agency relationship,one party called the principal agrees to represent or act for another called the agent.

A) True
B) False

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Question 42

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The agent must maintain separate accounts for the principal's funds and for the agent's personal funds,but may intermingle these accounts.

A) True
B) False

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Question 43

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The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

Darla serves in a representative capacity for Ellen's Botanicals.To accomplish the objectives of this relationship,Darla's authority can be implied by

A truck driver who drives a company truck on a regular basis is most likely an employee.

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn.Jess orally agrees to do so.This is an agency by

Ira serves in a representative capacity for Jett.Key is injured through Ira's negligence.Jett may be liable to Key if Ira's conduct occurred

A principal has a duty to pay an agent in a timely manner the customary compensation for services rendered.

An agency relationship is based on the attributes of power,control,and financial self-interest-not the trust and confidence of a fiduciary relationship.

Agency relationships cannot exist outside an employment,so agency law has a narrower reach than employment law.

Using an agent provides benefits to a principal,but can also result in liability imposed on the principal.

The equal dignity rule requires that a principal and an agent act in good faith and with mutual respect in their dealings with each other.