Question 1

"Furniture Store Woes." Manny was hired by John to deliver furniture purchased from John's furniture store, Good Furniture. John had authorized Manny to drive the delivery truck home from work, but Manny was not authorized to use the truck for any personal errands. Manny decided to help his friend Helen move believing that John would never find out. Unfortunately, while moving Helen's furniture to her new home, Manny was speeding and hit Bobby's vehicle in the rear causing whiplash to Bobby. Bobby is threatening to sue both John and Manny. Then, on his way to work in the same truck the next day, Manny again bumped a car driven by Joan who is threatening to sue both Manny and John. John also has another problem involving Connie, his niece, an aspiring interior designer who John hired to provide design services to customers. Both Connie and John were aware that customers would likely have no interest in the services of Connie if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Connie do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Connie did a terrible job. For example, she put in purple carpeting and painted the walls orange. Beth was outraged when she returned. She found out from Sandy, a disgruntled employee of John, that Connie actually had no training or experience in interior design. Sandy wants to sue both Connie and John.
-Which of the following is true regarding any liability John has to Sandy?

Accepted Answer

A)   John has no liability to Sandy.
B)   John has liability to Sandy under the theory of misrepresentation but only if Connie is insolvent.
C)   John is liable to Sandy under the theory of negligence.
D)   John is liable to Sandy for only 50% of any damages she can prove.
E)   John is liable to Sandy under the theory of misrepresentation.F) C) and D)
G) A) and C)

Question 2

"Furniture Store Woes." Manny was hired by John to deliver furniture purchased from John's furniture store, Good Furniture. John had authorized Manny to drive the delivery truck home from work, but Manny was not authorized to use the truck for any personal errands. Manny decided to help his friend Helen move believing that John would never find out. Unfortunately, while moving Helen's furniture to her new home, Manny was speeding and hit Bobby's vehicle in the rear causing whiplash to Bobby. Bobby is threatening to sue both John and Manny. Then, on his way to work in the same truck the next day, Manny again bumped a car driven by Joan who is threatening to sue both Manny and John. John also has another problem involving Connie, his niece, an aspiring interior designer who John hired to provide design services to customers. Both Connie and John were aware that customers would likely have no interest in the services of Connie if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Connie do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Connie did a terrible job. For example, she put in purple carpeting and painted the walls orange. Beth was outraged when she returned. She found out from Sandy, a disgruntled employee of John, that Connie actually had no training or experience in interior design. Sandy wants to sue both Connie and John.
-If John pays for the damage to Joan's car, does he have any remedy against Manny?

Accepted Answer

A)   If John covers Joan's damages, then John may receive full reimbursement from Manny based upon the right of indemnification.
B)   If John covers Joan's damages, then John is not entitled to any reimbursement from Manny.
C)   If John covers Joan's damages, John is only entitled to reimbursement from Manny for 50% of whatever he paid.
D)   Any recovery John receives from Manny will be based upon principles of comparative negligence.
E)   Any recovery John receives from Manny will be based upon principles of contributory negligence.F) A) and C)
G) D) and E)

Question 3

The principal may terminate an agency coupled with an interest.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true regarding notice of termination of an agency relationship?

Accepted Answer

A)   Notice of termination of an agency relationship must be given by actual notice.
B)   Depending on the circumstances, notice of termination can be actual or constructive.
C)   Notice of termination of an agency must be given in writing.
D)   Actual notice of termination of an agency relationship is not needed once 30 days have passed since the termination because at that point notice is presumed.
E)   Actual notice of termination of an agency relationship is not needed once 60 days have passed since the termination because at that point notice is presumed.F) A) and D)
G) All of the above

Question 5

"Unreliable Boyfriend." Bobby needs a business law book. He hears that Gwen has one for sale. Bobby asks his girlfriend Susie to buy it for him from Gwen if Susie can get it for under $40. Susie sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Susie does not mention that the book is for Bobby although all the parties were on good terms, and the identity of the buyer should not have affected Susie's agreement. Later, however, Polly agrees to give Bobby her used business law book. Bobby tells Susie that he no longer wants the book. Susie tells Gwen about the situation with Bobby. Gwen replies that she does not care if Bobby wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Bobby - she doesn't care who pays.
-Which of the following is true regarding whether Susie is personally bound on the contract with Gwen?

Accepted Answer

A)   Susie is not personally bound because she was acting on behalf of Bobby.
B)   Susie is personally bound unless she can establish that Gwen would not have sold her the book if she had known that Bobby was involved.
C)   Susie is personally bound unless she can establish that Bobby has the funds with which to pay Gwen.
D)   Susie is not personally bound unless Bobby is legally insolvent.
E)   Susie is personally bound.F) B) and E)
G) C) and E)

Question 6

Agents who go beyond their authority when the principal is disclosed or partially disclosed are liable to third parties for breach of contract, not breach of implied warranty.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true if a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal?

Accepted Answer

A)   The agent remains liable to the third party.
B)   The agent remains liable to the third party unless the dispute involves an amount less than $1,000 in which case the agent is released.
C)   The agent remains liable to the third party unless the dispute involves an amount less than $500 in which case the agent is released.
D)   The agent is released from liability to the third party.
E)   The agent is released from liability to the third party unless the principal resides in another state and has not paid the judgment within 30 days from when it was rendered.F) A) and B)
G) A) and C)

Question 8

Which of the following is false regarding termination of agency based on operation of law?

Accepted Answer

A)   Impossibility of performance terminates the agency relationship.
B)   An agency agreement is terminated whenever the agent, unknown to the principal, acquires an interest against the principal's interest.
C)   The agency agreement is terminated if the agent breaches the duty of loyalty he or she has to the principal.
D)   A change in law passed subsequent to the formation of an agency agreement may not result in termination of the agency agreement.
E)   If there is an unusual change in circumstances that leads the agent to believe that the principal's instructions do not apply, the agency relationship terminates.F) B) and E)
G) A) and D)

Question 9

If an agent makes _____ from the course of the employer's business, the employer is not liable.

Accepted Answer

A)   A substantial departure
B)   Any departure
C)   A minute departure
D)   An absolute departure
E)   An unauthorized departureF) A) and B)
G) A) and C)

Question 10

Which of the following is false regarding the relationship between a principal and an independent contractor?

Accepted Answer

A)   An independent contractor is not an employee of the principal.
B)   The principal does not control the details of the independent contractor's performance.
C)   An individual who hires an independent contractor cannot be held liable for the independent contractor's tortious actions under the doctrine of respondeat superior.
D)   A principal is not liable for extremely dangerous actions engaged in by the independent contractor.
E)   If an independent contractor commits a crime without the authorization of the principal, the principal is not liable for the agent's crime.F) C) and E)
G) A) and D) D

Question 11

Which of the following allows an agent to conduct all business for the principal?

Accepted Answer

A)   Special power of attorney
B)   General power of attorney
C)   Acknowledged power of attorney
D)   Durable power of attorney
E)   Equal power of attorneyF) D) and E)
G) A) and B)

Question 12

"Furniture Store Woes." Manny was hired by John to deliver furniture purchased from John's furniture store, Good Furniture. John had authorized Manny to drive the delivery truck home from work, but Manny was not authorized to use the truck for any personal errands. Manny decided to help his friend Helen move believing that John would never find out. Unfortunately, while moving Helen's furniture to her new home, Manny was speeding and hit Bobby's vehicle in the rear causing whiplash to Bobby. Bobby is threatening to sue both John and Manny. Then, on his way to work in the same truck the next day, Manny again bumped a car driven by Joan who is threatening to sue both Manny and John. John also has another problem involving Connie, his niece, an aspiring interior designer who John hired to provide design services to customers. Both Connie and John were aware that customers would likely have no interest in the services of Connie if they knew she had no experience and no training in design. Therefore, they inflated her accomplishments to customers telling them that she had both training and experience. In reliance on those claims, Beth agreed to have Connie do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Connie did a terrible job. For example, she put in purple carpeting and painted the walls orange. Beth was outraged when she returned. She found out from Sandy, a disgruntled employee of John, that Connie actually had no training or experience in interior design. Sandy wants to sue both Connie and John.
-Which of the following is true regarding John's liability to Bobby?

Accepted Answer

A)   John will likely be held liable for Bobby's injuries because while Manny was acting outside the scope of his duties at the time of the accident, he had not substantially departed from the course of his employer's business.
B)   John will likely be held liable for Bobby's injuries because Manny was driving John's truck at the time of the accident.
C)   John will likely be held liable for Bobby's injuries because Manny allowed John to take the truck home regardless of John's instructions regarding the use of the truck.
D)   It is unlikely that John will be held liable for Bobby's injuries because Manny had substantially departed from the course of his employer's business.
E)   It is unlikely that John will be held liable for Bobby's injuries unless it can be proven that Manny had no insurance and lacks the ability to pay.F) A) and C)
G) C) and D)

Question 13

Bobby wants to purchase a lot next door to Sarah's home that is owned by Sarah. Bobby knows Sarah will not sell the lot to him because of his barking dogs that she dislikes. Bobby agrees with Susie that Susie will purchase the lot from Sarah for him. Susie and Sarah reach an agreement and enter into a contract whereby Sarah is to sell the lot to Susie for a price within the scope of Susie's authority. Susie tells Sarah nothing about her plan to later transfer the lot to Bobby. Before title to the lot is transferred to Susie, Bobby tells Susie that he no longer wants the lot. Susie tells Sarah about Bobby. Sarah tells Susie that as far as she is concerned, Susie has bought a lot. Sarah says that she plans to move anyway and really does not care whether Susie or Bobby end up with the lot. She just wants her money and is unconcerned about barking dogs. They will be the next owner's problem. Which of the following is true regarding whether Susie is personally bound on the contract with Sarah?

Accepted Answer

A)   Susie is not personally bound because she was acting on behalf of Bobby.
B)   Susie is personally bound unless she can establish that Sarah would not have sold her the lot if she had known that Bobby was involved; and the contract is, therefore, void.
C)   Susie is personally bound unless she can establish that Bobby has the funds with which to pay Sarah.
D)   Susie is not personally bound unless Bobby has legally filed for bankruptcy.
E)   Susie is personally bound.F) A) and B)
G) B) and D)

Question 14

Which of the following is false regarding classification of principals?

Accepted Answer

A)   If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a disclosed principal.
B)   When the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is, the principal is a disclosed principal.
C)   An unidentified principal is in the same classification as a partially disclosed principal.
D)   If the third party does not know that an agent is acting on behalf of a principal, an undisclosed principal is involved.
E)   Classification of the principal is important because it helps determine the principal's liability.F) A) and E)
G) A) and B)

Question 15

Which of the following specifies that the agent's authority is intended to continue beyond the principal's incapacitation?

Accepted Answer

A)   Special power of attorney
B)   Durable power of attorney
C)   Nonterminable power of attorney
D)   Permanent power of attorney
E)   Living power of attorneyF) C) and D)
G) B) and C)

Question 16

As set forth in the text, which of the following is true regarding respondeat superior in Iraq?

Accepted Answer

A)   Iraq applies the same concept of respondeat superior  as the U.S.
B)   Iraq's law is influenced in part by classical Islamic law which suggests that those who cause harm should repair it.
C)   Iraqi law contains no exceptions under which respondeat superior  principles are permitted.
D)   Through a specific enactment, government municipalities may not be held liable for acts of employees.
E)   The concept of  respondeat superior is irrelevant in Iraq because civil actions for injury are not allowed.F) D) and E)
G) B) and E)

Question 17

"Unreliable Boyfriend." Bobby needs a business law book. He hears that Gwen has one for sale. Bobby asks his girlfriend Susie to buy it for him from Gwen if Susie can get it for under $40. Susie sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Susie does not mention that the book is for Bobby although all the parties were on good terms, and the identity of the buyer should not have affected Susie's agreement. Later, however, Polly agrees to give Bobby her used business law book. Bobby tells Susie that he no longer wants the book. Susie tells Gwen about the situation with Bobby. Gwen replies that she does not care if Bobby wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Bobby - she doesn't care who pays.
-What type of principal is Bobby?

Accepted Answer

A)   Disclosed
B)   Undisclosed
C)   Partially disclosed
D)   Unidentified
E)   Legally nonexistentF) A) and B)
G) D) and E) B

Question 18

Which of the following represented the position of the Supreme Court of Tennessee in the Case Opener in which the plaintiff attempted to hold a hospital vicariously liable for her injuries?

Accepted Answer

A)   That a defendant in the position of the hospital is vicariously liable for injuries received within its premises without a need for further proof.
B)   That because the plaintiff dismissed the hospital's alleged agent from the lawsuit, she could not proceed even though she had sued the hospital before dismissing the agent.
C)   That the plaintiff was barred from proceeding because vicarious liability is not recognized in the medical malpractice arena.
D)   That the plaintiff could proceed but only because she had already established liability on the part of the physician employees involved.
E)   That the hospital could be held vicariously liable if the plaintiff established that a wrongful act harming her occurred within the scope of the agent's employment.F) C) and D)
G) B) and D)

Question 19

A special power of attorney grants the agent express authority over specifically outlined acts.

Accepted Answer

A) True 
 B)False  True

Question 20

Which of the following is false regarding agency law in the United Arab Emirates (UAE) ?

Accepted Answer

A)   UAE Commercial Transaction Law is relevant in regard to agents.
B)   The UAE Civil Code is relevant in regard to agents.
C)   Registered agents may seek compensation when an agency ends even if the termination occurs in accordance with the terms of the agency agreement.
D)   Only registered agents are entitled to seek compensation in the event of termination.
E)   In regard to disputes about compensation of agents, court-appointed experts are usually the entities that are responsible for determining compensation amounts.F) B) and D)
G) B) and E)

Exam 34: Liability to Third Parties and Termination

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The principal may terminate an agency coupled with an interest.

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Which of the following is true regarding notice of termination of an agency relationship?

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Agents who go beyond their authority when the principal is disclosed or partially disclosed are liable to third parties for breach of contract, not breach of implied warranty.

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Which of the following is true if a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal?

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Which of the following is false regarding termination of agency based on operation of law?

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If an agent makes _____ from the course of the employer's business, the employer is not liable.

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Which of the following is false regarding the relationship between a principal and an independent contractor?

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D

Which of the following allows an agent to conduct all business for the principal?

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Which of the following is false regarding classification of principals?

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Which of the following specifies that the agent's authority is intended to continue beyond the principal's incapacitation?

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As set forth in the text, which of the following is true regarding respondeat superior in Iraq?

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B

Which of the following represented the position of the Supreme Court of Tennessee in the Case Opener in which the plaintiff attempted to hold a hospital vicariously liable for her injuries?

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A special power of attorney grants the agent express authority over specifically outlined acts.

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True

Which of the following is false regarding agency law in the United Arab Emirates (UAE) ?

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Exam 34: Liability to Third Parties and Termination

Correct AnswerverifiedShow Answer

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The principal may terminate an agency coupled with an interest.

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Which of the following is true regarding notice of termination of an agency relationship?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Agents who go beyond their authority when the principal is disclosed or partially disclosed are liable to third parties for breach of contract, not breach of implied warranty.

Correct AnswerverifiedShow Answer

Which of the following is true if a third party comes to know of an undisclosed principal's identity and obtains a judgment against the principal?

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Which of the following is false regarding termination of agency based on operation of law?

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If an agent makes _____ from the course of the employer's business, the employer is not liable.

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Which of the following is false regarding the relationship between a principal and an independent contractor?

Correct AnswerverifiedD

Which of the following allows an agent to conduct all business for the principal?

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Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is false regarding classification of principals?

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Which of the following specifies that the agent's authority is intended to continue beyond the principal's incapacitation?

Correct AnswerverifiedShow Answer

As set forth in the text, which of the following is true regarding respondeat superior in Iraq?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Which of the following represented the position of the Supreme Court of Tennessee in the Case Opener in which the plaintiff attempted to hold a hospital vicariously liable for her injuries?

Correct AnswerverifiedShow Answer

A special power of attorney grants the agent express authority over specifically outlined acts.

Correct AnswerverifiedTrue

Which of the following is false regarding agency law in the United Arab Emirates (UAE) ?

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D

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B

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True

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