1. What is the major distinction between an employee and an independent contractor?

Select one:

a. An independent contractor is always a fiduciary.

b. An independent contractor is required to be bonded and to carry insurance.

c. The employer has the right to tell an employee how to do the job, while an independent contractor has exclusive control over the way the job is done.

d. Independent contractors are hired under individual contracts, while employees must be hired under collective bargaining agreements.

2 Which of the following best describes the role of a general partner in a limited partnership (LP)?

Select one:

a. The general partner manages the partnership and remains personally responsible for partnership liabilities.

b. The general partner may participate in the business decisions of the limited partnership but will not be held personally liable for the debts of the business.

c. The general partner defers to the business decisions of the limited partners of the limited partnership unless those decisions seem economically unreasonable.

d. The general partner usually has an insignificant role in the overall business decisions of the limited partnership.

3 Sarah Smith works as a laser technician for a local dermatology center owned by consisting of physicians operating under a partnership agreement. Sarah purchased supplies through the mail from a medical supply facility totaling $5,000 for use by the doctors. She signed the contract that was provided to her by the supply facility in her name, Sarah Smith. A few weeks later the dermatologists became embroiled in a bitter dispute regarding profits and terminated the partnership. Unfortunately, the partners were not aware of the debt owed to the medical supply facility; and the bill remained unpaid. Sarah received a bill form the supply company for $5,000. Is she liable to the medical supply company, and why or why not?

Select one:

a. Yes, because she signed in her own name.

b. No, because the medical supply facility should have asked for proper identification and authorization.

c. Yes, because she was acting as an employee of the partnership.

d. No, because she was only acting as an employee of the partnership.

4 Perry owns a used car lot. Carla works for Perry selling used cars. Perry fully directs and controls her work, sets her hours, and pays her an hourly salary as well as a commission. Jordan comes to the lot to buy a used car. Carla, however, tells Jordan that she needs to sell her mother's used vehicle and that if Jordan will meet her after hours, she will give Jordan an excellent deal. Jordan meets Carla after work and ends up buying the car belonging to Carla's mother. The next day, Carla is moving a car and negligently backs it over the foot of J.D. (another customer). While waiting for the ambulance to come for J.D., Jordan storms onto the lot complaining about the condition of the vehicle she purchased from Carla's mother. Perry fires Carla on the spot. Carla informs him that she has been an excellent employee and that he has no reason to be unhappy with her. Does Perry have good cause to fire Carla? Why?

Select one:

a. Yes, she breached her duty of care.

b. No.

c. Yes, she breached her duty of loyalty.

d. Yes, she breached both her duty of loyalty and her duty of care.

5 Which of the following about an employee who commits a tort while acting in the scope of employment is true?

Select one:

a. The employee has no liability to the injured third party because of the doctrine of respondeat superior.

b. The employee has joint and several liability with the employer to the injured party.

c. The employee is entitled to be indemnified by the third party.

d. The employee must submit the claim to the employer's worker's compensations insurance provider.