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Exam 28: Relationship of Principal and Agent

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Question 31

True/False

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The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

A) True
B) False

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Question 32

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A power given as security creates a relationship of agency and actual authority.

A) True
B) False

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Question 33

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All of the following except which one is a duty of an agent?

Carolyn,a cashier at Tops Supermarkets,may cash checks for up to $20 over a purchase amount.A friend needs money for a dress so Carolyn cashes a check for $50 with no purchase.The check bounces.Carolyn is:

A durable power of attorney differs from a power of attorney in that the durable power of attorney:

Whether an agency relationship has been created is determined by using a subjective test.

Authority conferred upon an agent for a specified time does not continue after the specified time.

Bob owns a business delivering coffee and donuts within the downtown area of the city.Smith Co.calls him to deliver a large quantity of his products to their local office.While taking a coffee urn through the Smith Co.'s office,Bob drops it on Lester,scalding him.Who is liable?

The negligence of an agent who is an employee in conducting the business of the principal exposes the principal to tort liability for injury and loss suffered by third persons.

A principal may generally revoke the authority of an agent at any time.

An agent must act solely in the interest of his principal in all acts that would affect the principal's business.

In some states,the authority of an agent to sell land must be in writing and signed by the principal.

Which of the following is NOT a major duty,which the agent owes to the principal?

The result of an agent's functioning is exactly the same as if the principal had dealt directly with the third person.

Which of the following will terminate an agency coupled with an interest?

Harold,a painter,contracts to paint a portrait of Irene.However,he has one of his students do the actual work.This is a proper delegation of authority to an agent.

Agency relationships are governed primarily by federal statute.

Victor negligently led Gus to believe that Brenda had the authority to act on Victor's behalf.If Brenda had no authority but Gus reasonably and in good faith relied on Brenda's apparent authority:

Which of the following agents would not have authority to contract with third parties on behalf of the principal? a.A salesman who sells his employer's goods. b.A manager who hires employees for the store owner. c.A factory worker hired to operate a machine. d.A buyer who regularly buys merchandise for a store. e.All agents have authority to contract with third parties on behalf of their principals.

A(n) __________ is a person in a position of trust and confidence who has a duty of utmost loyalty and good faith.