Chap018 - Chapter 018 : Agency Chapter 018 : Agency...

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Chapter 018 : Agency Chapter 018 : Agency Student: ___________________________________________________________________________ 1. A person who represents another is known as a principal. BT: Knowledge PO: 1 True False 2. Anyone who is legally competent to act for himself or herself can act as an agent of himself or herself but cannot serve as an agent for another. BT: Analysis PO: 1 True False 3. Agents are usually classified according to the nature of their relationship with their principals. BT: Analysis PO: 2 True False 4. An agency by ratification results when a principal approves an unauthorized act performed by an agent. BT: Comprehension PO: 3 True False 5. An agency by invention is created when circumstances make such an agency necessary. BT: Comprehension PO: 3 True False
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6. An agency by operation of law is created when a court finds the need for an agency to achieve a desired social policy. BT: Knowledge PO: 3 True False 7. Express authority is the authority an agent reasonably assumes he or she has that relates to the express authority granted by the principal. BT: Knowledge PO: 4 True False 8. A principal is liable for the torts and crimes of the agent if they are committed at the direction of the principal or while the agent is performing authorized duties during the ordinary course of the agency. BT: Comprehension PO: 4 True False 9. It is not necessary for the agent to obey all of the principal's reasonable and lawful orders and instructions within the scope of the agency contract. BT: Knowledge PO: 5 True False 10. A principal must pay the agent the compensation agreed to in the contract. BT: Knowledge PO: 5 True False 11. If a person acts as agent for more than one party with their knowledge, the agent is entitled to receive compensation from each principal. BT: Knowledge PO: 5 True False
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12. A principal is not responsible to third parties for all agreements made by the agent on behalf of the principal even if the agent acted within the scope of his or her authority. BT: Analysis PO: 5 True False 13. When the agent informs the third party that he or she is acting on behalf of another, and makes the third party aware of the identity of the principal, the principal is known as a furtive principal. BT: Analysis PO: 5 True False 14. Agency is a type of contract and, like other contracts, may be terminated by agreement, by performance, or by operation of law. BT: Analysis PO: 6 True False 15. The legal principles governing the relationship of principal and agent and of employer and employee are entirely different from each other. BT: Knowledge PO: 7 True False 16. It is often necessary or desirable for a person or firm to be represented by another in business or personal dealings with third parties. This relationship is called a(n): A. employer-employee relationship. B. principal-agency relationship.
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This note was uploaded on 09/25/2011 for the course GENB 4350 taught by Professor Louis during the Spring '11 term at Houston Baptist.

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Chap018 - Chapter 018 : Agency Chapter 018 : Agency...

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