Reference no: EM13840064
1. _____ are best described as assurances by one party that the other party can rely on its representations of fact.
Promissory notes
Illusory promises
Copyrights
Warranties
2. Principal-agent relationships are most significant for issues that are included in the category of _____ law.
tort
contract
discrimination
wage
3. A gratuitous agent is one who:
acts without consideration.
freely substitutes his or her judgment for that of the principal.
finds a buyer for one party and a seller for another.
is paid for his or her services.
4. When an agent acquires interest against the principal's interest, without the principal's knowledge, the agency relationship terminates due to:
disloyalty of the agent.
change in law regarding the obligations of the agent.
the agency being coupled with an interest.
impossibility.
5. Which of the following statements is true of an implied warranty of fitness for a particular purpose?
Under the Uniform Commercial Code (UCC), the only implied warranty is the warranty of fitness for a particular purpose.
This implied warranty does not extend to third parties in any circumstances.
To invoke this implied warranty, the purchaser must have purchased or leased the good from a merchant.
To disclaim the implied warranty of fitness for a particular purpose, the seller must disclaim the warranty in writing.
6. A durable power of attorney:
grants the agent express authority only over specifically outlined acts.
is terminated on the principal's death.
specifies that the agent's authority is intended to continue beyond the principal's incapacitation.
allows the agent to conduct all business for the principal.
7. An agency relationship:
can be formed only by contract.
cannot be created by ratification.
cannot be formed by implied authority.
can be created only for a lawful purpose.
8. A(n) _____ typically allows the agent to conduct all business for the principal.
inherent agency power
general power of attorney
durable power of attorney
special power of attorney
9. Mitchel, a real estate agent, buys a property that his principal, Henry, wanted to buy. If Mitchel is aware that Henry wanted to buy the property,
then the court will:
grant Mitchel legal rights for the property.
grant Henry the legal rights for the property.
conduct an auction of the property.
sell the property to a third party.
10. Under implied warranty of fitness for a particular purpose, the:
seller or lessor need not know the buyer's reason behind the purchase.
seller or lessor does not have to be a merchant.
buyer or lessee must have made the payment in cash only.
goods purchased should be worth $500 or more.
11. Which of the following is true of the remedy of specific performance?
It can be used by the agent to force the principal to fulfill specific contractual agreements.
It can be used by the agent to force the principal to continue to employ him or her.
It can be used by the agent to recover for services rendered and/or future damages.
It can be used by the agent when the agency relationship is not contractual.
12. When a principal falsely leads a third party to believe that another individual serves as his or her agent, the principal has created agency by:
agreement.
implied authority.
estoppels.
ratification.
13. Under the Uniform Commercial Code (UCC), the buyer or seller must bring a lawsuit on a breach of warranty within:
eight years of when the breach occurred.
six months of when the breach occurred.
four years of when the breach occurred.
eight months of when the breach occurred.
14. An agent who feels that he or she is not being properly compensated, especially when working on commission,:
cannot withhold performance of duties.
can enact a constructive trust.
can use right of avoidance.
can demand an accounting.
15. Which of the following statements is true of independent contractors?
All independent contractors are agents.
Independent contractors can enter into contracts on behalf of the principal even without the authorization from the principal.
Building contractors, doctors, stockbrokers, and lawyers are types of independent contractors.
Employers are generally liable for the actions of independent contractors.
16. Which of the following statements is true of a constructive notice?
It usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed.
It is received by parties directly related to the agency agreement.
It must be given to third parties who have had business interactions with the agent, and it directly informs them about the termination.
It is rarely used to announce the termination of an agency agreement.
17. According to the Magnuson-Moss Act, if the written warranty for a consumer good does not indicate whether that warranty is a full warranty or
a limited warranty, it is presumed that the:
warranty is not enforceable.
seller can disclaim the warranty within six months.
good has limited warranty.
good or its defective part will be replaced if the good fails.
18. When a breach of contract is caused by an agent's negligence, a principal:
has a right of avoidance.
has a right to indemnification.
must enact a constructive trust.
cannot utilize tort remedies.
19. Which of the following types of termination occurs due to operation of law?
Renunciation of agent
Disloyalty of agent
Revocation of authority
Agency coupled with an interest
21. If a principal is partially disclosed:
the third party would be aware of the principal's identity.
only the agent would be liable in accordance with the contract.
the third party would be aware of the principal's existence but not his or her identity.
the third party would not know that an agent is acting on behalf of the principal.
22. The industry standards for the delivery of fragile items require that the product be packed in a bubble wrap within a carton box that has the
signs for "Fragile," "This way up," and "Caution" on it. But when a porcelain vase that Salma had purchased at a store was delivered to her,
the carton box did not have any of the required labeling on it and the vase was damaged. The scenario best illustrates a breach of the:
implied warranty of merchantability.
implied warranty of title.
implied warranty of fitness for a particular purpose.
implied warranty of trade usage.
23. Misrepresentation liability depends on:
whether the agent/employee was acting in the scope of employment.
the agent's duty of cooperation.
whether the principal authorized the agent's act.
the doctrine of "respondeat superior."
24. Joshua enters into an agreement with Cathy, an interior designer, to redo his house. Once Cathy has completed designing and decorating the
house, she no longer has the authority to act on Joshua's behalf. Under the given circumstances, the agency terminated due to:
lapse of time.
fulfillment of purpose.
impossibility.
renunciation by the agent.
25. To invoke implied warranty of merchantability in a sales or lease contract, the:
purchaser must have purchased or leased the good from a merchant.
buyer should prove that he or she is a merchant.
goods purchased or leased should be worth $5,000 or more.
seller should have transferred a void title to the buyer.
26. An agent who makes an unauthorized agreement has failed to meet the duty of _____.
performance
obedience
accounting
cooperation
27. Which of the following is true of agency law?
It is included under the category of customary law.
It is primarily state law.
It is standardized and is the same from state to state.
It is included under the category of federal law.
28. In a sales contract, the only exception to a buyer claiming title warranty occurs if the:
buyer is unaware that the seller is transferring goods for which no good title passes.
seller can transfer the void title of the goods to a buyer without the buyer's knowledge.
seller's act can be proved as unconscionable.
seller is obviously unable to guarantee title.
29. Which of the following termination occurs by act of parties?
Changed circumstances
Renunciation by an agent
Disloyalty of agent
Impossibility
30. Warranty rights for a good extends to third parties if they have been:
insured by the seller.
subjected to monetary loss due to unforeseeable misuse of the good.
identified in the sales or lease contract as a beneficiary.
injured by the good, even after using it reasonably.
31. Which of the following is true of the actual notice of termination?
It must be given to third parties who have had business interactions with the agent.
It usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed.
To terminate an agency agreement, it must always be in writing, irrespective of how the agent's authority was granted.
Parties not directly related to an agency agreement typically receive actual notice.
32. Which of the following, as suggested by the courts, is the most important duty an agent owes to the principal?
Duty of loyalty
Duty of obedience
Duty of notification
Duty of performance
33. Which of the following is true of the principal's liability for an independent contractor's actions?
The employer cannot escape liability for an independent contractor's tort, if the employer directs the contractor to commit the tort.
The employer can escape strict liability by hiring an independent contractor to complete the tasks for her.
The principal will not be held responsible for any damages caused due to extremely hazardous activities undertaken by the independent contractor.
An individual who hires an independent contractor is held liable for the independent contractor's tortious actions under the doctrine of "respondeat superior."
34. A buyer may waive rights to both implied and express warranties by failing to:
bring a lawsuit on a breach of warranty within six years of when the breach occurred.
get the goods insured within one year of purchase.
use the product within three months from the purchase.
comply with the seller's request to inspect the goods.
35. When it is generally accepted in the industry that a certain product is always preassembled and shrink-wrapped, the failure of the seller to
deliver the goods in that condition would be a breach of:
implied warranty of fitness for a particular purpose.
implied warranty of merchantability.
implied warranty of trade usage.
implied warranty of title.
36. Under the doctrine of "respondeat superior," the principal/employer holds _____, which is liability assigned without fault, for any harm the
agent/employee causes while working for the principal.
contributory liability
misrepresentation liability
vicarious liability
joint liability
37. An express warranty primarily includes a seller's:
intent to transfer the title of the goods to a buyer.
mere recommendations to the buyer.
description of the goods being purchased.
statement of opinion with regard to the good being purchased.
38. The 1975 federal law known as the Magnuson-Moss Act requires that:
if a buyer wants to invoke the implied warranty of merchantability, he or she must have purchased or leased the goods from a merchant.
the buyer or seller bring a lawsuit on a breached contract within five years of when the breach occurred.
the seller or lessor make the disclaimer for the implied warranty of fitness for a particular purpose orally.
if a seller decides to issue a written warranty for a consumer good, the seller must indicate whether that warranty is a full warranty or a limited warranty.
39. Edward hires a lawyer to serve as his agent. The lawyer is disbarred later because he was engaged in a series of illegal cases. Under the
given circumstances, the agency relationship is terminated due to:
impossibility.
change in law.
renunciation by the agent.
changed circumstances.
40. Which of the following statements is true of the requirements for ratification to be effective?
The principal must have complete knowledge of all material facts regarding the contract.
The principal can accept certain parts of the agent's act and reject others.
The principal can avoid ratifying the unauthorized act.
An individual must avoid misrepresenting himself or herself as an agent for another party.
41. When the principal is disclosed:
the third party is aware of the principal's existence but not his or her identity.
the agent is the only person who could be liable for the agreement.
the principal is liable for the agreements made with the third party.
the agent is partially liable because he or she is a party to the transaction.
42. Sheila walks into a hypermarket and asks a salesclerk for glue that can be used to stick wood. The salesclerk refers her to a section of
different adhesives. In this situation, which of the following warranties has been created?
Express warranty of merchantability
Express warranty of title
Implied warranty of fitness for a particular purpose
Implied warranty of trade usage
43. When an agent makes authorized expenditures in the course of working on behalf of the principal, and the principal refuses to pay the agent,
the principal is violating his or her:
duty of accounting.
duty to reimburse.
duty of performance.
duty to compensate.
44. Which of the following warranties essentially comes about when a seller or lessor knows or has reason to know why the buyer or lessee is
purchasing or leasing the goods in question?
Implied warranty of title
Implied warranty of fitness for a particular purpose
Implied warranty of trade usage
Implied warranty of merchantability
45. A _____ is a person who has a duty to act primarily for another person's benefit.
fiduciary
surety
conservator
guarantor