Question 1

Agents with authority over other agents are referred to as superior agents.

Accepted Answer

A) True 
 B)False

Question 2

As agents, they may under certain circumstances create liability to the principal in __________ and tort.

Accepted Answer

A)   financial performance
B)   corporate governance
C)   contract
D)   None of the choices are correct.E) A) and C)
F) B) and C)

Question 3

A principal may face joint-and-several liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.

Accepted Answer

A) True 
 B)False

Question 4

When a third party is completely unaware of an agency relationship and believes that the agent is acting on her own behalf when contracting, this is called a/an __________ agency.

Accepted Answer

A)   partially disclosed
B)   fully disclosed
C)   undisclosed
D)   None of the choices are correctE) All of the above
F) A) and B)

Question 5

Agents under all circumstances create liability to the principal in contract and tort.

Accepted Answer

A) True 
 B)False

Question 6

In a fully disclosed agency relationship, only the __________ is contractually obligated to the third party for authorized acts.

Accepted Answer

A)   private agent
B)   public agent
C)   principal
D)   All of the choices are correctE) A) and B)
F) B) and C)

Question 7

When the third party entering into the contract is aware of the principal's identity and knows that the agent is acting on behalf of the principal in the transaction, then the agency relationship is a/an __________ agency.

Accepted Answer

A)   partially disclosed
B)   fully disclosed
C)   undisclosed
D)   None of the choices are correct.E) C) and D)
F) B) and D)

Question 8

An agent's power to bind a principal in contract is derived from the agent's authority, which may arise from __________ authority.

Accepted Answer

A)   actual
B)   apparent
C)   ratification
D)   All of the choices are correct.E) All of the above
F) A) and C) D

Question 9

A principal may face __________ liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.

Accepted Answer

A)   bifurcated
B)   limited
C)   reduced
D)   joint-and-severalE) B) and C)
F) None of the above

Question 10

Principals often create agency relationships to give __________ the power to enter into contracts with third parties that are legally binding on the principal.

Accepted Answer

A)   agents
B)   conduits
C)   workers
D)   None of the choices are correct.E) A) and D)
F) All of the above

Question 11

If the third party knows that the agent is representing a principal but does not know the actual identity of the principal, the agency relationship is a/an __________ agency.

Accepted Answer

A)   partially disclosed
B)   fully disclosed
C)   undisclosed
D)   None of the choices are correct.E) B) and C)
F) A) and D)

Question 12

The doctrine of respondeat superior is limited by a requirement that in order for a principal (employer)  to be liable for the employee's tort, the act must have occurred within the employee's employment.

Accepted Answer

A)   persistence in
B)   cessation of
C)   timing of
D)   scope ofE) None of the above
F) A) and B)

Question 13

In an undisclosed agency relationship, the __________ is fully liable to perform the contract.

Accepted Answer

A)   agent
B)   third party
C)   principal
D)   All of the choices are correct.E) C) and D)
F) A) and D)

Question 14

Most C-level executives are referred to as __________ agents.

Accepted Answer

A)   issuer
B)   common
C)   private
D)   subordinateE) C) and D)
F) A) and D)

Question 15

One of the reasons agency is such a useful legal concept is because it allows businesses as __________ to grow and transfer authority to agents within the organization's chain of command.

Accepted Answer

A)   primaries
B)   principals
C)   markets
D)   commonsE) All of the above
F) A) and B)

Question 16

A CEO could be referred to as a/an __________ agent.

Accepted Answer

A)   private
B)   superior
C)   common
D)   minimalE) B) and C)
F) A) and B) B

Question 17

In a partially disclosed agency relationship, both the __________ and the agent may be liable for the obligations under the contract.

Accepted Answer

A)   sub-agent
B)   third party
C)   principal
D)   All of the choices are correctE) B) and C)
F) All of the above

Question 18

In Riley v. Standard Oil Co. of New York, 231 N.Y. 301 (N.Y. 1921) , the high court:

Accepted Answer

A)   remanded the case to the appellate court and ordered for a new trial
B)   reversed the appellate court and ordered for a new trial
C)   affirmed the appellate court
D)   remanded the case to the appellate courtE) C) and D)
F) A) and B)

Question 19

Liability for agents who are classified as employees is derived from the doctrine of __________.

Accepted Answer

A)   res ipsa loquitor
B)   nullification
C)   respondeat superior
D)   None of the choices are correctE) B) and D)
F) None of the above C

Question 20

If the employee's negligent __________ results in harm only to emotional state, reputation, or a purely economic loss, respondeat superior does apply.

Accepted Answer

A)   misappropriation
B)   mistake
C)   misapprehension
D)   misconductE) All of the above
F) A) and B)

Exam 38: Duties and Liabilities of Principals and Agents

Agents with authority over other agents are referred to as superior agents.

Correct AnswerverifiedShow Answer

As agents, they may under certain circumstances create liability to the principal in __________ and tort.

Correct AnswerverifiedShow Answer

A principal may face joint-and-several liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.

Correct AnswerverifiedShow Answer

When a third party is completely unaware of an agency relationship and believes that the agent is acting on her own behalf when contracting, this is called a/an __________ agency.

Correct AnswerverifiedShow Answer

Agents under all circumstances create liability to the principal in contract and tort.

Correct AnswerverifiedShow Answer

In a fully disclosed agency relationship, only the __________ is contractually obligated to the third party for authorized acts.

Correct AnswerverifiedShow Answer

When the third party entering into the contract is aware of the principal's identity and knows that the agent is acting on behalf of the principal in the transaction, then the agency relationship is a/an __________ agency.

Correct AnswerverifiedShow Answer

An agent's power to bind a principal in contract is derived from the agent's authority, which may arise from __________ authority.

Correct AnswerverifiedD

A principal may face __________ liability for an agent's tort, most commonly the tort of negligence, even though the principal has not engaged in any wrongful conduct.

Correct AnswerverifiedShow Answer

Principals often create agency relationships to give __________ the power to enter into contracts with third parties that are legally binding on the principal.

Correct AnswerverifiedShow Answer

If the third party knows that the agent is representing a principal but does not know the actual identity of the principal, the agency relationship is a/an __________ agency.

Correct AnswerverifiedShow Answer

The doctrine of respondeat superior is limited by a requirement that in order for a principal (employer) to be liable for the employee's tort, the act must have occurred within the employee's employment.

Correct AnswerverifiedShow Answer

In an undisclosed agency relationship, the __________ is fully liable to perform the contract.

Correct AnswerverifiedShow Answer

Most C-level executives are referred to as __________ agents.

Correct AnswerverifiedShow Answer

One of the reasons agency is such a useful legal concept is because it allows businesses as __________ to grow and transfer authority to agents within the organization's chain of command.

Correct AnswerverifiedShow Answer

A CEO could be referred to as a/an __________ agent.

Correct AnswerverifiedB

In a partially disclosed agency relationship, both the __________ and the agent may be liable for the obligations under the contract.

Correct AnswerverifiedShow Answer

In Riley v. Standard Oil Co. of New York, 231 N.Y. 301 (N.Y. 1921) , the high court:

Correct AnswerverifiedShow Answer

Liability for agents who are classified as employees is derived from the doctrine of __________.

Correct AnswerverifiedC

If the employee's negligent __________ results in harm only to emotional state, reputation, or a purely economic loss, respondeat superior does apply.

Correct AnswerverifiedShow Answer

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D

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B

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C

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