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Exam 26: Agency

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Question 31

Multiple Choice

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Spicy Wonder Hot Dog Vendors,Inc.,grants its agent Teona an exclusive territory in which to sell Spicy Wonder Hot Dog products.Spicy Wonder Hot Dog cannot compete with Teona in that territory under the principal's duty of 

A)  ​compensation. 
B)  ​compensation
C)  ​indemnification. 
D)  ​reimbursement.

E) None of the above
F) A) and B)

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Question 32

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An agency agreement can be implied by conduct. 

A) True
B) False

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Question 33

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A familiar example of an agent is the owner of a corporation. 

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf.In this relationship,Jewelry & Coin is 

Cory employs Daily Delivery Agency as an agent under a written agreement that describes the rights and duties of both parties.This is 

Fact Pattern 26-1Nadya and Owen work at Purified Water Company. Nadya is a sales representative who works with Purified's customers, including restaurants, grocery stores, and other businesses, as well as individual consumers. Purified closely supervises all of its sales reps, and dictates their schedules. Owen is an engineer who works in Purified's water treatment plant. -Refer to Fact Pattern 26-1.With respect to third parties,Nadya is Purified's 

The agent has the right to be compensated,and to be reimbursed and indemnified. 

An agent's duties to the principal are implied from the agency relationship only if the identity of the principal is disclosed to a third party. 

Kelvin is an agent for Lookout Mountain Accountants,Inc.On Lookout's behalf and at its request,Kelvin pays Nerdlinger for custom software designed for the management of Lookout's services.Kelvin's right to obtain the amount of those payments from Lookout arises under the principal's duty of 

A principal has a duty to cooperate with the agent and to assist the agent in performing his or he duties.

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends.If Roberta is liable for Steve's actions,it will be because their relationship is 

Emmett,an agent for Fridley,signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax.The government prosecutes Fridley for failing to pay the tax.He is 

Without authorization,Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house.Sari ratifies the contract.Later,Sari tries to rescind the part of the contract relating to the exterior.This attempt will be 

Under the doctrine of respondeat superior,an agent is liable for any harm caused to a principal by a third party. 

John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch.John makes a deal with Lawson,the owner of a local herd,and makes a down payment.Kelly fails to pay the rest of the price.Lawson sues John for breach of contract.John's right to hold Kelly liable for any damages that he has to pay is the right of 

Agency relationships normally are consensual. 

Dimitri,a certified public accountant and an investor,and Elinor,an insurance salesperson and a realtor,may create an agency relationship for 

Based on Nan's conduct,Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so.In this circumstance,Poppy has 

Vicarious liability is direct liability. 

Rondi holds herself out as possessing special accounting skills.As an agent,she must exercise the degree of skill or care expected of