Chapter 17b - Business Law Ethics Chapter 17b TRUE/FALSE...

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Business Law & Ethics- Chapter 17b TRUE/FALSE QUESTIONS 1. T An employee may act in the capacity of an agent. 2. T A minor can be an agent. 3. T A principal can ratify an agreement made without authorization on his or her behalf by one who is not his or her agent. 4. T A principal owes his or her agent a duty to act in good faith. 5. T Generally, a principal has a duty to pay an agent for services rendered. 6. T A principal’s liability in a contract with a third party may arise from the authority given to the agent to act on behalf of the principal. 7. F An agent’s authority must be implied for the agent’s act to bind a principal. 8. F A principal must ratify a contract to be bound to it. 9. T If an agent acts within the scope of authority, a partially disclosed principal is liable to a third party for contracts made by the agent. 10. T When a principal places an agent in a position to defraud a third party, the principal is liable for the agent’s fraudulent acts. 11. T A principal cannot be held liable for an agent’s crime. 12. T When the specific subject matter of agency is lost or destroyed, the agency terminates.
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