QUESTION 10

In the case of an undisclosed principal, a third party

	a.	can only recover from the principal.
	b.	can only recover from the agent.
	c.	cannot recover at all.
	d.	can recover from either the agent or the principal.

4 points

QUESTION 11

Janelle has an art collection that she wants to sell. She calls Amber and asks her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of

	a.	apparent authority.
	b.	respondeat superior.
	c.	intermediary agency.
	d.	express authority.

4 points

QUESTION 12

Elsa asks her friend Maggie to walk her dog for her, and Maggie agrees. While out walking, the dog gets away from Maggie and runs into Drew's garden, digging up some expensive plants. Which of the following statements best characterizes this situation?

	a.	Elsa is liable for the damages to Drew's garden because she exercised control over her agent, Maggie.
	b.	Maggie is liable for the damages to Drew's garden because she was walking the dog at the time of the damage.
	c.	Neither Elsa nor Maggie is liable for the damages to Drew's garden because no agency relationship existed between Elsa and Maggie.
	d.	Both Elsa and Maggie are equally liable for the damages to Drew's garden-the dog belongs to Elsa, but Maggie was walking him at the time of the damage.

4 points

QUESTION 13

Express authority is

	a.	when a principal grants authority by words or conduct that, reasonably interpreted, cause the agent to believe the principal desires the agent to act on the principal's account.
	b.	when a principal grants the agent the authority to act quickly in transactions without explicit approval of the principal.
	c.	the authority to perform acts that are reasonably necessary to accomplish a transaction, even if not explicitly approved.
	d.	when the principal's conduct causes a third party reasonably to believe that the agent is authorized, even if they haven't been.

4 points

QUESTION 14

Which of the following is the most appropriate term to use when describing management's duty to its shareholders?

	a.	Official duty
	b.	Legal duty
	c.	Fiduciary duty
	d.	Statutory duty

4 points

QUESTION 15

The concept of abandonment as it relates to scope-of-employment cases means

	a.	an act is within the scope of employment, even if expressly forbidden, if it is of the same general nature as that authorized or if it is incidental to the conduct authorized.
	b.	the principal is liable for the actions of the employee that occur while the employee is at work, but not for actions that occur after the employee has abandoned the principal's business.
	c.	the principal is liable for all of the actions of the employee, even after the employee has abandoned the principal's business.
	d.	the principal is liable if the employee is on a frolic of their own but not if the employee is simply on a detour from company business.

4 points

QUESTION 16

Treva, the production manager at Esday, was told by her supervisor to hire Elton, a 15-year-old boy, to operate an industrial machine. Hiring the 15-year-old violates child labor laws. What should Treva do in this situation?

	a.	Treva should hire Elton; she has a duty to obey her supervisor's instructions.
	b.	Treva should hire Elton; she has a duty of care to ensure that the government does not discover that Elton is 15 years old.
	c.	Treva should not hire Elton; she has a duty of care, and she would not be caring for Elton.
	d.	Treva should not hire Elton; she has a duty to obey her supervisor s instructions only if they are legal and ethical.

4 points

QUESTION 17

MegaCorp is incorporated under Delaware law. It is registered to do business in New York. Legally, in New York MegaCorp is known as what kind of corporation?

	a.	Domestic
	b.	Foreign
	c.	Secondary
	d.	Cumulative

4 points

QUESTION 18

Which state is particularly attractive to companies looking to incorporate?

	a.	Ohio
	b.	Alaska
	c.	Utah
	d.	Delaware

4 points

QUESTION 19

When a partner leaves a partnership, whether it be voluntary or by expulsion, death, or bankruptcy, it is called

	a.	dissociation.
	b.	termination.
	c.	detachment.
	d.	separation.

4 points

QUESTION 20

What federal agency requires that the seller of a franchise give the potential buyer a Franchise Disclosure Document (FDD) and audited financial statements?

	a.	Securities and Exchange Commission (SEC)
	b.	Interstate Commerce Commission (ICC)
	c.	Federal Trade Commission (FTC)
	d.	Franchise Sales Commission (FSC)