41. Hiring an individual with a criminal record is conclusive proof that the employer is liable for the tort of negligent hiring.

a. True

b. False

42. A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance.

a. True

b. False

43. A sole proprietor is subject to unlimited personal liability for the debts of the business.

a. True

b. False

44. Only direct losses from a breach of contract may be recovered by an injured party.

a. True

b. False

45. An LLC may be formed without filing formal articles of organization with the secretary of state.

a. True

b. False

46. After the dissolution of a partnership, partners retain the authority to perform any acts necessary to wind up the business.

a. True

b. False

47. The acts of the agent obligate the principal to third persons and give the principal rights against third persons.

a. True

b. False

48. An agency may arise by appointment, conduct, ratification, or operation of law.

a. True

b. False

49. A partner is an agent of the partnership and of the other partners.

a. True

b. False

50. A contractor's work can be so controlled by the hiring party that the contractor is regarded as an employee of the hiring person.

a. True

b. False

51. Which of the following will not result in dissolution of the partnership by court decree?

a. Insanity of a partner.

b. Incapacity of a partner.

c. Withdrawal of a partner.

d. Habitual drunkenness of a partner.

52. The remedy of specific performance will most likely be granted in the case of a(n):

a. employment contract.

b. contract to buy shares of publicly-traded stock.

c. contract for the sale of real property.

d. contract for the sale of Florida oranges.

53. Initially, ratification is a question of: ______.

a. intention.

b. consideration.

c. form.

d. implication.

54. A party working for and under the control of another and authorized to enter into contracts for that other person or entity is called an: ______.

a. employee.

b. agent.

c. independent contractor.

d. attorney

55. Under the RULPA, a limited partner may contribute: ______.

a. cash only.

b. property only.

c. services only.

d. cash, property, and services.

56. What is not a correct statement concerning promoters?

a. Promoters are generally active before the corporation is formed.

b. Two (2) or more promoters are required to form a corporation.

c. Promoters are fiduciaries with respect to the corporation and its shareholders.

d. Promoters are liable for any torts that they commit while promoting the corporation.

57. Members of a limited liability company share profits:

a. according to their status (general or limited) in the firm.

b. in proportion to their contribution of services.

c. in proportion to their capital contribution.

d. according to the terms of the operating agreement.

58. A(n) _______ allows the owners to be taxed like a partnership but with limited liability.

a. corporation.

b. franchise.

c. limited liability company.

d. joint venture.

59. A provision stipulating the amount of money damages to be paid in the event of default or breach of contract is known as a __________ damages clause.

a. nominal

b. contract

c. liquidated

d. breach

60. The people in a corporation responsible for the management of the business are the: ______.

a. partners.

b. shareholders.

c. board of directors.

d. licensees.