1.While an agent is travelling in the United States on sales calls, his principals - a husband and wife in partnership - die in an auto accident. He is informed of the deaths, and knowing that the children of the deceased, who are also active in the business will take it over, the agent signs a contract within his authority with a third party. Which of the following statements is true?

a)The principals' estate must honour the contract.

b)The children, on assuming ownership of the business, must honour the contract.

c)The agent and principal become liable on the contract.

d)The third party can sue the agent for breach of warranty of authority.

e)The principal is in breach of the agency agreement.

2.Binding agent-principal relationships may arise in a number of ways. These include

a)conveying the impression that one person has the authority to act on behalf of another.

b)a written contract agreement between the principal and the agent.

c)a verbal agreement between the agent and the principal.

d)by estoppel.

e)all of these.

3.Where the actions of a person convey the impression to a third party that he or she has given authority to a particular person to act as their agent

a)the agent has actual authority and the contract is of binding legal effect.

b)a contract negotiated by such an agent does not have to be ratified by the principal at a later time.

c)third parties may assume that the agent has authority to bind the principal until notice to the contrary has been given to the third party.

d)the agent may be liable to the principal for acting under implied, but not actual authority.

e)a, c, and d.

4.Ingrid was the purchasing agent for Fashion Boutique Inc. She was authorized to place orders up to $10,000, but would have to get the owner's approval for anything larger. Ingrid had made numerous purchases from Jade Clothing over the past three years. The owner of Jade was aware of Ingrid's authority to purchase merchandise, but not of any limitations on the size of the order. On January 17^th, she placed an order for $13,672 without getting approval. Will Jade Clothing be able to enforce this contract?

a)No, because they were not informed of Ingrid's limitations in the agency relationship.

b)Yes, since the agent was within her actual authority.

c)No, because Ingrid was in breach of warranty of authority.

d)Yes, since the third party had no reason to believe that Ingrid did not have the authority to bind the principal.

e)No, since the increase in value of the new order is clearly outside Ingrid's authority and the principal should not be bound by her actions.

5.Although Jason had participated in the flower auction for the last nine years as an agent for Thos. Holt's Ltd. (Holt), with the authority to buy whatever he felt the store needed, on this day he was given express instructions to buy only cut flowers. When flats of young camellia bushes with a rare gold flower were being sold, Jason bought them on behalf of the company. Which of the following is true?

a)Holt is not bound by the contract, because Jason's authority was expressly restricted.

b)Holt is estopped from denying Jason's authority.

c)The key to determining whether or not Holt is bound by the contract is this: in the circumstances, should the auctioneer have confirmed with Holt the extent of Jason's authority?

d)Holt is not bound by the contract, because Jason is in breach of his agency agreement.

e)Holt is not bound since Holt didn't ratify the contract.

6.A principal is not bound in contract with the third party with whom the agent dealt, if the agent is:

a)Outside his authority but the principal ratified it

b)Within his express authority

c)Outside his actual and apparent authority

d)Within his implied authority

e)Within his apparent authority

7.Which of the following statements is FALSE with regard to ratification in agency law?

a)A principal cannot ratify a contract if he did not have the capacity to contract at the time the contract was made.

b)A principal can ratify a contract inadvertently.

c)If an agent exceeds her express authority, ratification is the only means by which the principal would be bound to honour the unauthorized contract.

d)Ratification gives the agent authority retroactive to the time of contract.

e)A principal cannot ratify a contract if at the time of the ratification he could not have entered into the contract.

8.Mr. Snarey devised and conducted a fraudulent scheme while working as an agent of Mutual Life. What would the likely result be?

a)Neither the agent nor the company could be liable, because Snarey was only an agent, and the company had no actual knowledge.

b)Only the agent was liable, because the action taken was dishonest and therefore outside the scope of the agency relationship.

c)Since Snarey was an agent with authority to enter into this general type of transaction, the company was vicariously liable for his conduct.

d)The company could be liable only if it were shown Snarey was an employee acting under the direction of a superior.

e)The third party has to make a choice of who they take legal action against. They cannot sue both.

9.Chris was a systems analyst hired to determine the best system for a retail china shop. After a careful analysis of the shop's needs and the available software, Chris presented a written report, which was approved by the owner of the business. Chris was paid his fee and was asked by the owner of the shop if he would act as agent in purchasing the hardware and software recommended in his report. The purchase was not to exceed $40 000 and the commission was to be $1000. Chris agreed. Read each of the following separately and indicate which is TRUE.

a)The agreement to act as agent fails to be a valid agency contract because it is not in writing.

b)If Chris buys the hardware and software himself for $36 000 and sells it to the owner for $39 000, he is entitled to his commission because the price to the owner is still less than the price allowed.

c)Chris will not be in breach of his fiduciary duty if he buys the recommended system from a firm in which he has an interest, even if he does not mention that fact to the owner.

d)Chris is entitled to accept a commission from both the seller and the purchaser, as long as the total price paid by the purchaser is less than $40 000 and the hardware and software is comparable to that recommended in the report.

e)Chris could be in breach of his duties if he delegated the task to someone else.

10.Which of the following is a TRUE statement about the employer-employee relationship?

a)An employer cannot impose a duty of confidentiality on an employee, as this is a violation of the Charter of Rights and Freedoms.

b)An employee for a company could not also be an agent at the same time for the company.

c)The critical factor in this relationship is control; the employer tells the employee not only what to do but also how to do it.

d)If an employer contracts to paint Mr. Shore's barn and sends an employee to do the painting, if the employee is not paid he can sue his employer or Mr. Shore for his wages.

e)One responsibility of an employer is to provide the employee with lifetime work availability.

11.Drew got a non-union, senior management job. After the first day, Drew went to his dad to discuss his obligations to his boss and his boss's obligations to him. Which of the following is FALSE?

a)The employer owes Drew not only pay, but also some direction.

b)Drew must be punctual and obedient.

c)Drew owes the employer a fiduciary duty (i.e., a duty to serve the employer's interests above his own).

d)If Drew wants to quit, he must give the employer proper notice unless the employer has done some wrong (e.g., given an unreasonable or dangerous order).

e)The employer cannot terminate Drew's employment unless Drew does something wrong.

12.Which one of the following is just cause for dismissal?

a.Absenteeism twice in the last year

b.Habitual negligence or incompetence

c.Tardiness once in the last two years

d.No work to do

e.Refusal to work in an unsafe work environment

13.John had worked for his employer for 15 years when he was terminated without notice or pay in lieu of notice. He filed a lawsuit for wrongful dismissal as he felt there was no just cause for the termination, although he did believe there had been a plot to get rid of him. Which of the following is correct?

a)In the absence of just cause, John would likely be entitled to reasonable pay in lieu of notice, but no punitive damages unless the employer had committed some tort related to John.

b)In the absence of just cause, John would likely be entitled to reasonable pay in lieu of notice and punitive damages as he was fired without just cause.

c)In the absence of just cause, John would likely be entitled to reasonable pay in lieu of notice and punitive damages due to the employer's malicious and outrageous act.

d)John should have filed his lawsuit as a case of constructive dismissal in order to win punitive and aggravated damages.

e)Even if there was no just cause, John likely would not be entitled to any compensation as he did not suffer actual psychological harm as a result of losing his job.

14.Vanessa had been a waitress at Joe's Good Eats for seven years. There had always been differences between Vanessa and Joe because they had radically different views on politics, religion, and sports, but Joe had always overlooked these differences because he liked Vanessa and she was a good waitress. However, on one busy day with the restaurant full of customers, Joe began ranting about city politics. Vanessa whispered, "Please, Joe, you know I don't agree." It ended with Joe yelling, "I've had it with your radical ideas. Get out!" So Vanessa left. The employees at Joe's were not unionized. If Vanessa sues for unlawful dismissal, she will be entitled to damages equivalent to which of the following?

a)One week's pay (the statutory minimum)

b)Her regular pay until she finds another job

c)Nothing

d)The amount that would have been paid during a reasonable notice period less any amounts received from other employment

e)The amount of pay received in one pay period (e.g., one month if paid monthly)

15.Anil just received a job offer to be a waiter at the Zen 7 restaurant. He was told he will be paid minimum wage plus 60% of the tips from his tables. Which law will establish minimum wage?

a)Workers compensation laws

b)Human rights laws

c)Occupational health and safety laws

d)Employment Standards Act

e)Common Law

16.Which of the following is NOT relevant in determining how much notice is reasonable in case of wrongful dismissal?

a)the length of service of the employee

b)the employee's level of position within the company

c)the availability of similar employment

d)the age of the employee

e)the economic situation of the employer

17.John Li has worked as manager of a video store for six years. Since the 7-Eleven next door began renting movies for 97 cents per night, Li's business has fallen off drastically. Accordingly, the owner of the video store told Li that, because the business had fallen on such hard times, he would take over managing and Li would have to assume the counter duties. The present counter clerk would be laid off. The owner also told Li that his wages would be reduced by 15%. When Li came to work the next day, he told the owner that he wouldn't accept the job working at the counter. The owner became angry and said, "If you don't like it, then you can leave! I don't have to put up with your insubordination for one minute!" Li left and then sued the owner for unlawful dismissal. The owner argued that he had "just cause": economic slowdown and disobedience. Based on the above facts, which of the following statements is TRUE:

a)The owner cannot dismiss without cause even if he gives proper notice or pay in lieu thereof.

b)The owner could fire Li without notice or pay in lieu of notice because Li refused his order to take over the counter, despite this being a constructive dismissal.

c)Li would win the unlawful dismissal action because the owner constructively dismissed him by unilaterally changing Li's job without Li's consent and insisting that Li do it.

d)If Li were wrongfully dismissed, he does not have to mitigate his losses by looking for a new job until the case has been resolved.

e)The owner was justified in firing Li without notice or pay in lieu of notice because of economic slowdown.

Thank you so much for your assistance.