Multiple Choice

Choose the single choice among the 4 choices that best completes the statement or answers the question.

1.When the owner of goods delivers goods to a merchant and the goods are of a kind the merchant deals in, this is known as

a.a principal/agent relationship.

b.an independent contractor relationship.

c.an entrustment.

d.an employer/employee relationship.

2.An agents implied authority

a.is not always present in a principal/agent relationship.

b.can cause additional liability to be imposed on the agent.

c.exists by virtue of being reasonably necessary to carry out the agents express authority.

d.can only be disclaimed by the principal, not the agent.

3.Ratification

a.is an agents approval of actions taken by his/her principal.

b.must be in writing.

c.is a principals approval of his/her agents unauthorized act.

d.must be made within a reasonable time to be effective.

4.An undisclosed principal

a.has no liability.

b.is bound to any contract properly made by his/her agent with a third party.

c.is liable under the UCC if a reasonable person under similar circumstances would find him/her liable.

d.may be subject to punitive damages for fraud.

5.If a seller or lessor of goods has stolen the goods

a.his/her title to the goods is voidable.

b.the owner of the goods can reclaim the goods if the owner acts promptly after discovery of the theft or acts promptly after he/she should have discovered the theft.

c.can pass title to the goods to a good faith purchaser of the goods who has given consideration for the goods.

d.his/her title to the goods is void.