Ch32-TB1-WBL-10e

Ch32-TB1-WBL-10e - Chapter32 LiabilitytoThirdParties...

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Chapter 32 Liability to Third Parties  and Termination N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. If a contract is in writing, the agent’s authority to perform the same duty  must be in writing. ANSWER: T PAGE: 651 TYPE: N 2. An agent’s authority must be implied for the agent’s act to bind a principal. ANSWER: F PAGE: 651 TYPE: + 3. An agent’s authority to act on behalf of a principal derives exclusively from  the agent’s express authority. ANSWER: F PAGE: 651 TYPE: + 4. A principal may confer authority on an agent only in writing. ANSWER: F PAGE: 651 TYPE: = 67
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68 TEST BANK 1—UNIT SEVEN: AGENCY AND EMPLOYMENT 5. A power of attorney is a written document. ANSWER: T PAGE: 651 TYPE: = 6. A power of attorney can be given only  by  an actual attorney. ANSWER: F PAGE: 651 TYPE: N 7. In considering the scope of an agent’s implied authority, the test is whether  the agent reasonably believed that he or she had the authority. ANSWER: T PAGE: 652 TYPE: = 8. Apparent authority exists if a principal causes a third party to believe  reasonably that an agent has authority to act. ANSWER: T PAGE: 653 TYPE: = 9. The failure of a principal to affirm promptly an unauthorized transaction  by an agent is a ratification of the transaction. ANSWER: F PAGE: 654 TYPE: = 10. If a principal does not ratify an  unauthorized  contract, the principal is not  bound. ANSWER: T PAGE: 654 TYPE: = 11. A disclosed principal is one whose identity is known by a third party with  whom a contract is made. ANSWER: T PAGE: 654 TYPE: N 12. When an agent enters into a contract on behalf of a principal, the principal  must ratify the contract to be bound to it. ANSWER: F PAGE: 654 TYPE: = 13. disclosed  principal is not liable to a third party for contracts made by the  agent acting outside the scope of his or her authority. ANSWER: T PAGE: 654 TYPE: +
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CHAPTER 32: LIABILITY TO THIRD PARTIES AND TERMINATION 69 14. If an agent acts within the scope of his or her authority, an   undisclosed  principal is liable to a third party for contracts made by the agent. ANSWER: T PAGE: 656 TYPE: N 15. An e-agent is a person. ANSWER: F PAGE: 656 TYPE: =
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70 TEST BANK 1—UNIT SEVEN: AGENCY AND EMPLOYMENT 16. A  principal is liable for harm caused to a third party by an agent who  commits a tort while acting in the scope of his or her employment.
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This note was uploaded on 10/15/2010 for the course ACCT ACCT40 taught by Professor Birnbaum during the Fall '08 term at CUNY Brooklyn.

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Ch32-TB1-WBL-10e - Chapter32 LiabilitytoThirdParties...

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