Question 1

A ________ power of attorney grants an agent express authority over specific outlined acts, in contrast to a ________ power of attorney, which grants an agent authority to conduct all business for the principal.
A) Special; durable
B) Special; general
C) General; durable
D) Durable; general
E) Durable; special

Accepted Answer

A special power of attorney grants an agent authority over specific acts, while a general power of attorney allows an agent to conduct all business for the principal.

Question 2

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
-Which of the following is true regarding whether Greg has any right of recovery against Simone for his injured foot?
A) Greg has no right of recovery against Simone because Lea had not dropped any boxes before, and Simone had no reason to suspect she would injure Greg.
B) Greg has a right of recovery against Simone only if Lea is insolvent.
C) Greg has a right of recovery against Simone, but only for 50% of his damages.
D) Greg has no right of recovery against Simone unless he is able to establish wrongdoing on her part in hiring Lea.
E) Greg has a right of recovery against Simone.

Accepted Answer

Under the legal principle of vicarious liability, an employer can be held responsible for the negligent actions of an employee if those actions were committed in the course of employment. Since Lea's negligence occurred while she was performing her duties, Simone can be held liable for Greg's injuries.

Question 3

[Beach Home] Wendy hires Rob to find and negotiate a price for her perfect vacation home. Rob previously helped Wendy find a home and Wendy was very satisfied with his service. Wendy had many demands for her dream vacation home and told Rob that each demand was nonnegotiable. Wendy desired her home to have five bedrooms, seven bathrooms, a large master suite with a balcony, a pool house, and she wanted the property to be within a block of the beach. Rob informed Wendy this was a high demand and he was not confident he could find a property that met all of Wendy's requirements within her price range. Wendy thought Rob was underestimating himself and told him that she was not willing to budge. Rob finds a home that meets all of her requirements, except it is five blocks from the beach. Rob informed the seller he was working on behalf of a principal and the property met all of her requirements. Rob negotiates an outstanding price and is excited to share it with Wendy. Rob tells Wendy about the stellar price and Wendy is devastated that the property is not in her defined location. She immediately calls the seller to rescind the offer but the seller declines, stating the offer is binding because as the seller knew, Rob had authority to contract and the seller was not aware of Wendy's requirements.
-What is Wendy's best cause of action?
A) Wendy should sue the seller for breach of implied warranty.
B) Wendy should sue Rob for breach of implied warranty.
C) Wendy should sue the seller for breach of contract.
D) Wendy should sue Rob for breach of contract.
E) Wendy does not have a valid cause of action against the seller or Rob.

Accepted Answer

The answer of [Beach Home] Wendy hires Rob to find...

Question 4

Which of the following is not a way an agency relationship will terminate by acts of the parties?
A) Fulfillment of purpose
B) Change in circumstances
C) Mutual agreement by the parties
D) Renunciation by the agent
E) Agency coupled with interest

Accepted Answer

A change in circumstances is not an act of the parties but rather an external factor that can lead to the termination of an agency relationship.

Question 5

When would an agent who breaches his or her agreement be liable for a breach of implied warranty?
A) When the principal is undisclosed.
B) When the principal is partially disclosed.
C) When the principal is disclosed.
D) When the principal is disclosed or partially disclosed.
E) When the principal is partially undisclosed.

Accepted Answer

When the principal is disclosed or partially disclosed, the agent may be liable for a breach of implied warranty.

Question 6

The text discussed the case of Aguas v. State of New Jersey, where the New Jersey Supreme Court addressed a correctional officer's hostile work environment claim in which she alleged that she had was sexually harassed by her supervisor on several occasions. Which of the following was the result?
A) The employer was not liable because it had an anti-discrimination policy in place.
B) The plaintiff successfully stated her claim for hostile work environment and was granted a $1,000,000 award in damages.
C) The case was dismissed because the employer launched a thorough internal investigation, which revealed no harassment had occurred.
D) The case was dismissed because there was an anti-discrimination policy in place, the employer conducted a thorough investigation of the claims, and there was no evidence the alleged harassment derived from the supervisory relationship.
E) The employer was liable because it failed to look into applicants' background before hiring.

Accepted Answer

The New Jersey Supreme Court in Aguas v. State of New Jersey held that the employer was not liable for the hostile work environment claim because it had an effective anti-discrimination policy in place, it conducted a thorough investigation into the claims, and there was no evidence that the harassment was a result of the supervisory relationship.

Question 7

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae 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 Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
-If Jun pays for the damage to Gina's car, does he have any remedy against Connor?
A) If Jun covers Gina's damages, then Jun may receive full reimbursement from Connor based upon the right of indemnification.
B) If Jun covers Gina's damages, then Jun is not entitled to any reimbursement from Connor.
C) If Jun covers Gina's damages, Jun is only entitled to reimbursement from Connor for 50% of whatever he paid.
D) Any recovery Jun receives from Connor will be based upon principles of comparative negligence.
E) Any recovery Jun receives from Connor will be based upon principles of contributory negligence.

Accepted Answer

Jun may seek full reimbursement from Connor based on the right of indemnification because Connor was acting outside the scope of his employment when he caused the damage to Gina's car, making Connor personally liable for the damages.

Question 8

Which type of liability applies when engaging in activities that have an inherently dangerous nature?
A) Misrepresentation liability
B) General liability
C) Strict liability
D) Special liability
E) Vicarious liability

Accepted Answer

Strict liability applies to activities that are inherently dangerous, where the party engaging in the activity can be held liable for any damages that result, regardless of fault or negligence.

Question 9

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae 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 Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
-Which of the following is true regarding Jun's liability to Tomás?
A) Jun will likely be held liable for Tomás's injuries because while Connor 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) Jun will likely be held liable for Tomás's injuries because Connor was driving Jun's truck at the time of the accident.
C) Jun will likely be held liable for Tomás's injuries because Jun allowed Connor to take the truck home regardless of Jun's instructions regarding the use of the truck.
D) It is unlikely that Jun will be held liable for Tomás's injuries because Connor had substantially departed from the course of his employer's business.
E) It is unlikely that Jun will be held liable for Tomás's injuries unless it can be proven that Connor had no insurance and lacks the ability to pay.

Accepted Answer

Jun is unlikely to be held liable for Tomás's injuries because Connor was using the truck for personal errands, which is a substantial departure from his employment duties.

Question 10

[The Big Sale] Simone, the owner of ABC department store, needed to hire a number of employees in a hurry because of a big summer sale she was planning. Jamal was hired by Simone to run a cash register and to assist customers with taking large purchases to their cars. Jamal encountered a particularly annoying customer, Ryan. Ryan started complaining the minute he saw Jamal. Ryan complained about having to wait for Jamal to assist him with carrying his television purchase to his car, about the merchandise in the store, and about the quality of the store's employees. Jamal tried to control himself while he carted Ryan's television to the car; however, when Ryan began verbally attacking Jamal's appearance and professional manner, Jamal threw the television to the ground and punched Ryan in the nose. Ryan chose to investigate Jamal's employment history and discovered that Jamal had been fired from his previous three jobs for taking violent action against customers. Two of his former employers were willing to testify that if Simone had called them, they would have disclosed Jamal's tendencies to her. Jamal listed the former employers on his application, but because she was in a hurry to hire employees, Simone did not take the time to check with the former employers. Another problem confronting Simone during the big sale is that Lea, a long-time employee of Simone who had never caused any problems before, accidentally, but negligently, dropped a box on the foot of a customer, Greg. Greg had to have an X-ray and is threatening to sue both Simone and Lea.
-Which of the following is true regarding whether Greg has any right of recovery against Lea for his injured foot?
A) Greg has no right of recovery against Lea because of her status as an employee.
B) Greg has no right of recovery against Lea because she did not intentionally harm him.
C) Greg has a right of recovery against Lea only if Simone cannot be located for service of process.
D) Greg has a right of recovery against Lea only if Simone is bankrupt.
E) Greg has a right of recovery against Lea.

Accepted Answer

Greg has a right of recovery against Lea because employees can be held personally liable for their negligent actions, even if those actions occur in the course of employment.

Question 11

[Beach Home] Wendy hires Rob to find and negotiate a price for her perfect vacation home. Rob previously helped Wendy find a home and Wendy was very satisfied with his service. Wendy had many demands for her dream vacation home and told Rob that each demand was nonnegotiable. Wendy desired her home to have five bedrooms, seven bathrooms, a large master suite with a balcony, a pool house, and she wanted the property to be within a block of the beach. Rob informed Wendy this was a high demand and he was not confident he could find a property that met all of Wendy's requirements within her price range. Wendy thought Rob was underestimating himself and told him that she was not willing to budge. Rob finds a home that meets all of her requirements, except it is five blocks from the beach. Rob informed the seller he was working on behalf of a principal and the property met all of her requirements. Rob negotiates an outstanding price and is excited to share it with Wendy. Rob tells Wendy about the stellar price and Wendy is devastated that the property is not in her defined location. She immediately calls the seller to rescind the offer but the seller declines, stating the offer is binding because as the seller knew, Rob had authority to contract and the seller was not aware of Wendy's requirements.
-If Wendy refuses to compensate Rob for his services rendered, what would be the result it Rob sued Wendy for unpaid wages?
A) Wendy would prevail because she did not authorize Rob to extend an offer.
B) Wendy would prevail because Rob exceeded his authority in the transaction.
C) Wendy would prevail because Rob should sue the seller, not Wendy.
D) Rob would prevail because Wendy owed him money for services rendered.
E) Rob would prevail because he negotiated a vacation home for Wendy that met most of her requirements.

Accepted Answer

Rob exceeded his authority by making an offer on a property that did not meet Wendy's nonnegotiable requirement of being within a block of the beach. Therefore, Wendy would prevail because Rob acted beyond the scope of his authority.

Question 12

What type of principal exists when his or her identity is not known and the third party is not aware that the agent is making an agreement on behalf of the principal?
A) Partially disclosed principal
B) Identified principal
C) Disclosed principal
D) Partially identified principal
E) Undisclosed principal

Accepted Answer

An undisclosed principal is one whose identity is not revealed to the third party by the agent, and the third party is unaware that the agent is acting on behalf of a principal.

Question 13

The text discussed the case of Dunkley v. S. Coraluzzo Petroleum Transporters, where the New Jersey Appellate Court addressed an employer's liability for the harassing conduct of its supervisor. Which of the following was the result?
A) The employer was not vicariously liable because it maintained a handbook of anti-discrimination policies and complaint methods, provided it to employees upon hire and directed them to become familiar with the information provided, and took steps to prevent plaintiff from further harassment.
B) The employer was not vicariously liable because it fired the supervisor.
C) The plaintiff was successful because the employer did not have any policies in place to prevent the harassment that occurred and the employer did not take steps to prevent the harassment once it became aware.
D) The plaintiff was successful because the employer could not prove its employees were aware or should have been aware of its policies.
E) The plaintiff was successful because the employer admitted it knew the supervisor harassed the plaintiff but failed to take action.

Accepted Answer

The employer was not found vicariously liable due to its proactive measures in maintaining and communicating anti-discrimination policies, and taking steps to prevent further harassment, demonstrating due diligence in preventing workplace harassment.

Question 14

What is the rationale behind vicarious liability?
A) Under the time and place theory, the employee would not have caused harm at that exact time and place had it not been for the employer.
B) The employer benefits from the work of the employee, therefore, the employer should also be responsible for any harm the employee caused.
C) The employer did know or should have known his or her employee would cause harm.
D) The employer typically has more money to pay for the harm.
E) The employer should have better hiring practices.

Accepted Answer

Vicarious liability is based on the principle that since the employer benefits from the employee's work, they should also bear responsibility for any harm caused by the employee in the course of their employment.

Question 15

The text discussed the case of Burlington Industries, Inc. v. Ellerth, where the U.S. Supreme Court addressed workplace harassment and defined two ways an employer may be liable for torts of its employees while acting outside the scope of employment. Which of the following is one of those ways?
A) The employer knew or should have known of the employee's harm and failed to stop it.
B) The employer outsourced its human resources overseas and failed to follow traditional U.S. human resources procedures.
C) The employer failed to conduct a semi-annual training on appropriate workplace behavior.
D) The employer failed to monitor its employees.
E) The employer had bad hiring practices.

Accepted Answer

In Burlington Industries, Inc. v. Ellerth, the U.S. Supreme Court held that an employer can be liable for the torts of its employees acting outside the scope of their employment if the employer knew or should have known about the harassment and failed to take appropriate action to stop it. This principle is part of establishing employer liability in cases of workplace harassment.

Question 16

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?
A) The defendant was not held liable because it had no reason to know a former employee was stealing from its clients.
B) The defendant was not held liable because the former employee's act exceeded the scope of his employment.
C) The defendant was not held liable because the plaintiff should have known the employee was no longer employed by the defendant.
D) The defendant was held strictly liable because the nature of the acts involved were inherently dangerous.
E) The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated.

Accepted Answer

The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated.

Question 17

Which type of liability does a principal have when it authorizes an agent to engage in an act and the agent intentionally or unintentionally falsifies his or her role?
A) Misrepresentation liability
B) Vicarious liability
C) Ratification liability
D) General liability
E) Strict liability

Accepted Answer

When a principal authorizes an agent to act on their behalf and the agent misrepresents their role, the principal can be held liable for misrepresentation, as they are responsible for the agent's actions within the scope of their authority.

Question 18

Which of the following is not a way an agency relationship will terminate by operation of law?
A) Death
B) Bankruptcy
C) Impossibility
D) Lapse of time
E) War

Accepted Answer

Lapse of time is a method of terminating an agency relationship by mutual agreement or as stipulated in the contract, not by operation of law. Death, bankruptcy, impossibility, and war are all events that can terminate an agency relationship by operation of law without the parties' intervention.

Question 19

[Furniture Store Woes] Connor was hired by Jun to deliver furniture purchased from Jun's furniture store, Good Furniture. Jun had authorized Connor to drive the delivery truck home from work, but Connor was not authorized to use the truck for any personal errands. Connor decided to help his friend Adriana move, believing that Jun would never find out. Unfortunately, while moving Adriana's furniture to her new home, Connor was speeding and hit Tomás's vehicle in the rear, causing whiplash to Tomás. Tomás is threatening to sue both Jun and Connor. Then, on his way to work in the same truck the next day, Connor again bumped a car, driven by Gina, who is also threatening to sue both Connor and Jun. Jun also has another problem involving Hae, his niece, an aspiring interior designer who Jun hired to provide design services to customers. Both Hae and Jun were aware that customers would likely have no interest in the services of Hae 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 Hae do the interior design work for her new business building while Beth was out of town on an extended business trip. Unfortunately, Hae did a terrible job. Beth was outraged when she returned. She found out from Destiny, a disgruntled employee of Jun, that Hae actually had no training or experience in interior design. Beth wants to sue both Hae and jun.
-Which of the following is true regarding any liability Jun has to Beth?
A) Jun has no liability to Beth.
B) Jun has liability to Beth under the theory of misrepresentation but only if Hae is insolvent.
C) Jun is liable to Beth under the theory of negligence.
D) Jun is liable to Beth for only 50% of any damages she can prove.
E) Jun is liable to Beth under the theory of misrepresentation.

Accepted Answer

Jun and Hae misrepresented Hae's qualifications to Beth, leading her to rely on those false statements when agreeing to have Hae do the interior design work. This constitutes misrepresentation, making Jun liable to Beth for the consequences of that reliance.

Question 20

What type of principal exists when his or her identity is not known but the third party is aware that the agent is making an agreement on behalf of the principal?
A) Partially disclosed principal
B) Identified principal
C) Disclosed principal
D) Partially identified principal
E) Undisclosed principal

Accepted Answer

In a situation with a partially disclosed principal, the third party knows that the agent is acting on behalf of a principal, but the identity of the principal is not revealed.

Quiz 34: Liability to Third Parties and Termination

A power of attorney grants an agent express authority over specific outlined acts, in contrast to a power of attorney, which grants an agent authority to conduct all business for the principal.

Which of the following is not a way an agency relationship will terminate by acts of the parties?

When would an agent who breaches his or her agreement be liable for a breach of implied warranty?

The text discussed the case of Aguas v. State of New Jersey, where the New Jersey Supreme Court addressed a correctional officer's hostile work environment claim in which she alleged that she had was sexually harassed by her supervisor on several occasions. Which of the following was the result?

Which type of liability applies when engaging in activities that have an inherently dangerous nature?

What type of principal exists when his or her identity is not known and the third party is not aware that the agent is making an agreement on behalf of the principal?

The text discussed the case of Dunkley v. S. Coraluzzo Petroleum Transporters, where the New Jersey Appellate Court addressed an employer's liability for the harassing conduct of its supervisor. Which of the following was the result?

What is the rationale behind vicarious liability?

The text discussed the case of Burlington Industries, Inc. v. Ellerth, where the U.S. Supreme Court addressed workplace harassment and defined two ways an employer may be liable for torts of its employees while acting outside the scope of employment. Which of the following is one of those ways?

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?

Which type of liability does a principal have when it authorizes an agent to engage in an act and the agent intentionally or unintentionally falsifies his or her role?

Which of the following is not a way an agency relationship will terminate by operation of law?

What type of principal exists when his or her identity is not known but the third party is aware that the agent is making an agreement on behalf of the principal?