5. Which statement best describes the actual authority of an agent?a. It must be created in writing.
b. It may be express or implied.
c. It cannot be easily customized.
d. It is always limited in time and scope.
10. Which statement best describes fiduciary relationships?
a. All fiduciaries are agents.
b. All agents are fiduciaries.
c. All fiduciaries are employees.
d. All employees are fiduciaries.
13. What would a court require evidence of in order to establish the existence of a fiduciary duty
owed to a plaintiff?
a. the principal's influence and trust
b. the defendant's reliance, power, and influence
c. the agent's influence and reliance
d. the plaintiff's reliance, trust, and vulnerability
15. Karim's agent, Monica, was instructed to negotiate a contract to buy a new delivery truck for
Karim's courier business but not to disclose Karim's identity, other than to indicate she is acting
for 'an undisclosed buyer'. Which statement best describes this situation?
a. Karim and Monica will both be bound by the contract.
b. Only Monica will be bound by the contract.
c. Only Karim will be bound by the contract.
d. Neither Karim or Monica will be bound by the contract.
16. Blanchett Lighting Supplies has terminated the employment of Drako, its long-time purchasing
agent. What an advisable step for Blanchett to take after terminating this agency relationship?
a. Ensure the termination agreement is put into writing.
b. Ensure that third parties are notified.
c. Ensure an indemnity agreement is in place.
d. Ensure the agent is informed in writing of the termination.
17. Which form of business organization provides the most control but also the greatest liability risk
for the owner?
b. sole proprietorship
c. joint venture
18. Which form of a business can issues shares to raise capital for operations?
a. an unlimited proprietorship
b. a sole proprietorship
c. a limited liability partnership
d. a corporation