1. A person whose work is not subject to the control of the principal, but who arranges to perform a job for him is called

Group of answer choices

a subagent

a servant

a special agent

an independent contractor

2. As a general rule, a principal is not

Group of answer choices

liable for tortious acts of an agent, even when the agent is negligent

liable for acts of a servant within the scope of employment

criminally liable for the acts of the agent

liable for the non-delegable duties performed by independent contractors

3. The basic law of partnership is currently found in

Group of answer choices

common law

constitutional law

statutory law

none of the above

4. Reference to "moral hazard" in conjunction with hybrid business forms gets to what concern?

Group of answer choices

that general partners in a limited partnership will run the firm for their benefit, not the limited partners' benefit.

that the members of a limited liability company or limited liability partnership will engage in activities that expose themselves to potential liability.

that the trend toward limited liability gives bad actors little incentive to behave ethically because the losses caused by their behavior are mostly not borne by them

that too few modern professional partnerships will see any need for malpractice insurance

5. Partnerships

Group of answer choices

are free to select any name not used by another partnership

must include the partners' names in the partnership name

can be formed by two corporations

cannot be formed by two partnerships

6. An agent's duty to the principal includes

Group of answer choices

a duty to indemnify

the duty to warn of special dangers

the duty to avoid self dealing

all of the above

7. An agency relationship may be created by

Group of answer choices

contract

operation of law

an oral agreement

all of the above

8. One of the advantages to the LLC form over the sub-S form is

Group of answer choices

in the sub-S form does not provide "full-shield" insulation of liability for its members

the LLC cannot have a "manager-manager" form of control, whereas that is common for sub-S corporations.

In the sub-S form, corporate profits are effectively taxed twice.

the LLC form requires fewer formalities in its operation (minutes, annual meetings, etc).

9. That partnerships are entities under RUPA means the parters are not personally liable for the firm's debts beyond their capital contributions.

Group of answer choices

True

False

10. Donners, Inc., a partner in CDE Partnership, applies to Bank to secure a loan and assigns to Bank its partnership interest. After the assignment, which is true?

Group of answer choices

Bank does not become a partner, but has the right to participate in the management of the firm to protect security interest until the loan is paid.

Bank is entitled to Donner's share of the firm's profits

Bank is liable for Donner's share of the firm's losses.

None of these is true.

11. If you break a civil law, you will go to jail.

Group of answer choices

True

False

12. Natural law recognizes the lawmaker's command as the most legitimate.

Group of answer choices

True

False

13. An unliquidated debt is a debt

Group of answer choices

one is unable to pay

not yet paid

of uncertain amount

that is unenforceable debt

14. The legislative, executive and judicial branches all have a measure of control over administrative agencies.

Group of answer choices

True

False

15. To successfully claim false imprisonment, a plaintiff must have been completely confined.

Group of answer choices

True

False

16. List the fiduciary duties owed by an agent and give a real world example of one of them.

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17. If a principal terminates an agency relationship, what are some important actions to take afterwards?

18. Why wouldn't a corporation be possible without agency?

19. How does Washington State pay for Workers' Compensation? Explain how the compensation model works.

20. How does the Zone of Risk test differ from the historical approach to employer liability?

21. Please explain

The following story was in the news.

"Cyberthieves steal hundreds of millions of dollars a year from the bank accounts of U.S. businesses.Stuart Rolfe, a Seattle businessman, was one of them. Cyberthieves hacked his email account, impersonated him and transferred more than $1 million through U.S. domestic accounts to an account in China.

He was stunned. "Any time you have a theft, certainly one of this dollar amount, it is shocking and very disturbing," he says.

Rolfe's firm, Wright Hotels, invests in and develops hotel properties.

Rolfe says one of the most unsettling things was realizing that once the cyberthieves had accessed his email, they had vast and intimate knowledge of his life and business practices.

"They knew exactly how I had communicated with our bookkeeper," he says. "They knew exactly what kinds of things that I said" in emails to her authorizing transfers. He made another disturbing discovery: When he looked back at the transfers, he found that when they were authorized he always seemed to be in business meetings.

That's because the thieves also had access to his Outlook calendar. It meant the cyber crooks could safely impersonate Rolfe and write emails telling his bookkeeper to transfer funds to their bank accounts. The thieves could respond to any questions from Rolfe's bookkeeper and then delete all those communications from the account before Rolfe returned from his meetings and checked his email again.

"The response was that they were terribly sorry for our loss, but that they could not accept any responsibility nor offer any reimbursement to us for the loss," he says.

JPMorgan declined to be interviewed but provided a written response saying it regrets Rolfe's loss. The bank said it had followed exactly the procedure Rolfe had agreed to for transferring funds.

Rolfe says the bank should be held liable because the size, frequency and destination of the fraudulent transfers were completely out of character for his account.

"There should have been 15 or 20 different red flags that would have gone up in our account if the bank had been paying any attention to these requests," Rolfe says. He argues there's a flaw in the legal system if banks are not responsible for providing that type of protection."

Questions:

Who was the principle? Who was the agent? What duties were owed? What kind of authority did the agent have?

Using IRAC, answer the issue question "Is the bank liable for compensating Rolfe for the fraudulent transfers? Use the answers from the questions above to substantiate your answer.