Chapter
19 Examination
True/False
Indicate
whether the sentence or statement is true or false.
____
1.
Employees who deal with third parties are agents of their employers.
____
2.
Agency relationships do not exist outside employment relationships.
____
3.
There must be a written agreement between two parties to create an agency
relationship.
____
4.
All agency relationships are based on contract.
Multiple
Choice
Identify
the letter of the choice that best completes the statement or answers the
question.
____
5.
Nora is an executive for Omega Corporation. When acting for Omega in an
ordinary business situation, Nora is
|
a. |
an
agent only. |
|
b. |
a
principal only. |
|
c. |
an
agent and a principal. |
|
d. |
none
of the above. |
____
6.
Helen retains Jack to act as her authorized business agent. Helen does
not know that Jack is a minor. Jack enters into a contract on Helen’s behalf.
The contract is
|
a. |
binding
on Helen. |
|
b. |
binding
on Jack. |
|
c. |
void. |
|
d. |
voidable. |
____
7.
Donna employs Executive Representatives, Inc., as an agent. They sign an
agreement that describes the rights and duties of both parties. This is
|
a. |
apparent
authority. |
|
b. |
equal
authority. |
|
c. |
express
authority. |
|
d. |
implied
authority. |
____
8.
Lynn may hire employees to work in the computer store she manages despite
the fact that her employment agreement with the owner says nothing about her
being able to hire employees. This is
|
a. |
apparent
authority. |
|
b. |
equal
authority. |
|
c. |
express
authority. |
|
d. |
implied
authority. |
____
9.
Phil is an agent for Quality Products Corporation. Whether it is
reasonable for Reserve Supply Company to believe that Phil has the authority to
enter a particular contract on Quality’s behalf, when Phil does not actually
have that authority, is a question of
|
a. |
apparent
authority. |
|
b. |
general
authority. |
|
c. |
power
of authority. |
|
d. |
special
authority. |
____
10.
A-One Auto Sales, Inc., employs Best Collection Company as a collection
agent. While repossessing goods from Carl, one of A-One’s customers, Best
causes an accident in which Carl is injured. Carl can recover from
|
a. |
A-One
only. |
|
b. |
Best
only. |
|
c. |
A-One
or Best. |
|
d. |
none
of the above. |
Chapter
19 Examination
Answer
Section
TRUE/FALSE
1.
ANS:
T
REF:
447
OBJ:
TYPE: =
2.
ANS:
F
REF:
447
OBJ:
TYPE: =
3.
ANS:
F
REF:
449
OBJ:
TYPE: +
4.
ANS:
F
REF:
451
OBJ:
TYPE: =
MULTIPLE
CHOICE
5.
ANS:
A
REF:
446
OBJ:
TYPE: =
6.
ANS:
A
REF:
449
OBJ:
TYPE: =
7.
ANS:
C
REF:
457
OBJ:
TYPE: +
8.
ANS:
D
REF:
457
OBJ:
TYPE: =
9.
ANS:
A
REF:
457
OBJ:
TYPE: =
10.
ANS:
C
REF:
463
OBJ:
TYPE: +