Quiz 25: Principal-Agent, Employer-Employee, and Third-Party Relationships

An agent's implied authority is set out in the agency agreement.

A principal who ratifies an unauthorized contract is bound by its terms.

Express authority must be in writing to be effective.

A power of attorney is an example of express authority.

An agent has implied authority to perform any act necessary to carry out the principal's business.

The principal usually lists in writing all of the agent's duties.

A principal is liable only for acts the agent is authorized to perform.

A principal is liable for all torts committed by an agent.

An agent is never liable on contracts entered into for the principal.

An agent is liable if he or she acts for an undisclosed principal.

Even if he or she neglects to sign the principal's name on a contract, an agent is not liable on the contract.

A principal may ask an agent to assume equal liability on a contract.

A person who pretends to be an agent is not liable on any contract.

An agent is liable on a contract if the agent signs the principal's name.

A principal is not generally liable for an agent's crimes.

If a principal authorizes an agent to buy a tractor for $10,000, this is an example of A) certain authority. B) express authority. C) incidental authority. D) apparent authority

A power of attorney is an example of A) incidental authority. B) implied authority. C) statutory authority. D) express authority.

An agent's scope of authority generally includes A) implied authority. B) apparent authority. C) express authority. D) all of these.

If an agent has apparent authority, any contracts made are A) binding on the principal. B) voidable by the principal. C) understood as necessary to carry out the purposes of the agency. D) none of these.

The authority that an agent has because the principal leads third parties to believe that the agent has it is called A) implied authority. B) customary authority. C) apparent authority. D) none of these.

An agent's authority to act in an emergency is a type of A) express authority. B) apparent authority. C) implied authority. D) oral authority.

If an agent commits a tort while acting within the scope of the agency, the party who is liable is A) the agent alone. B) the principal alone. C) both the principal and the agent. D) neither the principal nor the agent.

Crenner, an agent of Alden, injured Bliss through her negligence. Bliss may sue A) Crenner. B) Alden. C) both Crenner and Alden. D) neither Crenner nor Alden.

A principal may be held liable to third parties for torts committed by an agent if the A) agent is a gratuitous agent. B) third party notifies the principal. C) third party notifies the agent. D) agent acts within the scope of the agent's authority.

Blair, an agent of Curtis, smashed the windows of Arlen's car on purpose. A) Only Blair is liable to Arlen. B) Only Curtis is liable to Arlen. C) Both Blair and Curtis are liable to Arlen. D) Neither Blair nor Curtis is liable.

An agent may be personally liable to third parties on a contract if A) the agent assumes liability. B) the agent signs a negotiable instrument in his or her own name and issued by the third party on the instrument. C) the agent acts for an undisclosed principal. D) all of these.

If a third party learns the identity of an undisclosed principal the A) contract is void. B) third party may hold the agent liable. C) third party may hold the principal liable. D) third party may hold either the agent or the principal liable.

A principal whose identity is fully revealed to all parties is a(n) A) undisclosed principal. B) partially disclosed principal. C) disclosed principal. D) none of these.

Lawrence asked Foote to sell a diamond that Lawrence owned. Foote signed a contract with Bell to sell the diamond, but when Bell learned that Lawrence was the principal, she refused to go ahead with the contract. Lawrence can sue A) Foote for breach of contract. B) Bell for breach of contract. C) Foote and Bell for conversion. D) neither Foote nor Bell.

A person who pretends to be an agent A) is personally liable to a third party. B) binds the principal. C) binds the third party. D) has the power of ratification.

Crenner, an agent of Alden, injured Bliss through her negligence. If Bliss obtains a judgment against Crenner, A) Crenner can recover from Alden. B) Crenner cannot recover from Alden. C) Crenner can recover from Alden only if it was proved that Alden was negligent. D) none of these.

Boyd, an agent of Lowell, made a contract with Brink and signed the contract "S. Lowell (principal) by A) Boyd, agent." If Boyd breaches the contract, Brink can sue A) only Lowell. B) only Boyd. C) both Boyd and Lowell. D) neither Boyd nor Lowell.

Uhlen told Bixby that he had been appointed by Green to sell Green's car, and Bixby agreed to buy it. Uhlen was in fact not Green's agent. If Green refuses to sell the car to Bixby, Bixby can sue A) Uhlen for breach of contract. B) Green for breach of contract. C) both Uhlen and Green. D) neither Uhlen nor Green.

If an agent commits a crime of which the principal is unaware, A) the principal can be held liable. B) the agent can be held liable. C) both the agent and the principal can be held liable. D) none of these.

If a principal tells an agent to falsify income tax returns, A) the principal cannot be held liable. B) the agent can be held liable if he or she carries out the principal's orders. C) both principal and agent can be held liable. D) none of these.

____________________ refers to the extent of the agent's authority to carry out the principal's business.

A power of attorney is an example of ____________________ authority.

An agent hired to sell a house has ____________________ authority to advertise the sale.

If an agent enters into a contract without authority to do so, the ____________________ is not liable on the contract.

The extent of the agent's duties while carrying out the principal's business is the ____________________.

If an agent intentionally commits assault and battery, only the ____________________ is liable.

A principal is liable to third parties for ____________________ committed by the agent while acting within the scope of the agency.

If the agent does not tell third parties that he or she is an agent, the principal is said to be ____________________.

If an agent neglects to include the principal's name on a contract, only the ____________________ is bound by the contract.

A principal is not liable for ____________________ committed by an agent.

Rice hired Carter, a real estate broker, to buy a certain piece of land from King for $25,000. Carter signed a contract agreeing to pay King $30,000. When Rice heard, she refused to go through with the contract. What action can King take?

Ruth, an agent, was asked by her principal to also sign a contract involving the sale of merchandise to Flower. If the contract is breached, may Flower sue both Ruth and her principal for damages?

Blair hired Towner to sell Blair's car at auction. On the way to the auction, Towner hit a pedestrian, Green, at an intersection. Can Green recover from Blair?

Russ, a salesperson in a clothing store, got into an argument with a customer. He struck and injured the customer, who required hospital treatment. Is the owner of the clothing store liable for the customer's injuries?

Without authority, Moss falsely represented himself as Buck's agent and contracted to buy goods from Early. Buck refused to accept them. Could Early hold Buck liable?