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Exam 32: Agency Formation and Duties

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Question 51

Multiple Choice

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The most important factor weighted by the courts in determining employee status is

A) the degree of control an employer exercises over the details of the work.
B) the distinction between the occupations of a worker and an employer.
C) the method of payment, whether by time period or completion of work.
D) the skill required of the worker to do a job.

E) B) and C)
F) A) and D)

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Question 52

Multiple Choice

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Roc is an agent for Statistics Inc. On the firm's behalf and at its request, Roc pays Tech LLC for specially customized software. Roc's right to obtain the amount of the payment from Statistics Inc. arises under the duty of

A) none of the choices.
B) compensation.
C) indemnification.
D) reimbursement.

E) C) and D)
F) B) and D)

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Question 53

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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.

When an agent, acting within the scope of his or her authority, contracts with a third party, in most states, the agent is treated as a party to the contract.

A sudden storm threatens the property of Marina Bay LLC. Ngoc, Marina Bay's sales agent, is on site, but lacks the express or implied authority to bind the firm to the cost of appropriate protective measures. Unable to communicate with Marina Bay, Ngoc

Velma is a purchasing agent for Wild-Caught Fish Inc., with the authority to buy the catches of commercial fishers up to a certain quantity. When the limit is reached, the agency relationship terminates

When a principal has given a third party reason to believe that an agent has authority to act, the principal may be estopped from denying that authority.

Cal directs Diego, Cal's agent, to harvest the hay on Edna's farm, although neither Cal nor Diego has the right to go onto the land and cut and remove the crop. Liability for the trespass and damage to the property extends to

A principal is always directly responsible for an agent's misrepresentation made within the scope of the agent's authority.

Milos employs Natalie to handle a list of financial transactions on Milos's behalf. This power will terminate on

An agent must keep confidential any information acquired through an agency during the term of the relationship, but can disclose it after the agency ends.

Because those who cannot legally enter into contracts directly cannot do so indirectly through an agent, a principal must

Anything that an agent obtains by virtue of an agency relationship is his or hers to keep.

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

There is no condition under which a principal must indemnify an agent for a tort claim arising from the agency relationship.

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

An agent may not exceed his or her actual authority, even in an unforeseen emergency to protect or preserve the property and rights of the principal.

The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent .

Part of the rationale for the doctrine of respondeat superior is that an injured person should be afforded effective relief, which is usually best provided by a business because

Based on Jin's conduct, Kai reasonably believes that Lore has the authority to act on Jin's behalf even though Lore does not have the actual authority to do so. In this circumstance, Lore has