Understanding Business and Personal Law

Chapter 18: Creation of an Agency

Creation of an Agency


1.	An agency relationship lets us
		A)	provide a service to others without fear of liability.
		B)	act through other people to accomplish things that might be impossible to do on our own.
		C)	enter into a contract to provide services to a local community agency.
		D)	use an agency outside the state we reside in to provide consumer protection.


2.	A servant is a person who works for but is not under the control of a proprietor.
		A)	TRUE
		B)	FALSE


3.	Respondeat superior applies to master-servant relationships because the master has the right to control the physical conduct of the servant.
		A)	TRUE
		B)	FALSE


4.	A person who has been given authority to perform any act within the scope of a business is a(n)
		A)	agent by estoppel.
		B)	special agent.
		C)	general agent.
		D)	ratified agent.


5.	A sales representative is an example of a(n)
		A)	agent by estoppel.
		B)	special agent.
		C)	general agent.
		D)	ratified agent.


6.	When the law creates an agency relationship by circumstance, it is called agency by estoppel.
		A)	TRUE
		B)	FALSE


7.	A subagent is an agent
		A)	who can hire and fire employees.
		B)	who serves as a discretionary agent.
		C)	who has the authority to perform any act within the scope of the business.
		D)	lawfully appointed by another agent.


8.	A principal is generally bound to the terms of a contract made by an agent unless
		A)	the agent has no authority to enter into the contract.
		B)	negligent retention has occurred.
		C)	the principle of respondeat superior is in place.
		D)	the agent is considered a master.


9.	Vicarious liability is usually limited to intentional torts.
		A)	TRUE
		B)	FALSE


10.	Coagents are subject to the authority of the principal as well as to each other.
		A)	TRUE
		B)	FALSE