BUL 5810 Chapter 19, 20, 42, 39, 46,
30, 32, 33 Homework and Video
Quizzes (Exam 2) And correct/Verified
Answers.
A power of attorney is a formal manifestation that states an agent's authority. The agent is
known as the:
a. fiduciary.
b. servant.
c. attorney in fact.
d. independent contractor. - Answer c. attorney in fact.
A(n) __________ is a written instrument that expresses the principal's intention that the agent's
authority will not be affected by the principal's subsequent incapacity or that the agent's
authority will become effective upon the principal's subsequent authority.
a. fiduciary
b. Agency by Estoppel
c. Last Will and Testament
d. durable power of attorney - Answer d. durable power of attorney
agency is a consensual relationship that the principal and agent may form by:
a. state common law.
b. contract or agreement.
c. federal or state statutes.
d. administrative law. - Answer b. contract or agreement.
Is the agent subject to liability to her principal for breach of the duty of obedience if she sells
the principal's product on credit in violation of explicit instructions?
a. No, that is a risk that the principal takes in this type of transaction.
b. Yes, but the principal will end up without recourse for the loss.
c. Yes, and she is liable to the principal for any amounts that the purchaser doesn't pay.
d. All of these are correct. - Answer c. Yes, and she is liable to the principal for any amounts
that the purchaser doesn't pay.
Which of the following will terminate a valid durable power of attorney after the principal is
incapacitated?
,a. The death of the principal.
b. Insolvency of the principal.
c. A subsequent durable power of attorney granted by the principal.
d. None of these are correct. - Answer a. The death of the principal.
Which of the following is a major duty, which the agent owes to the principal?
a. Duty to compensate.
b. Duty to act in good faith and with loyalty.
c. Duty to indemnify.
d. Duty to compete. - Answer b. Duty to act in good faith and with loyalty.
If the agent is authorized to sell certain property of her principal for $1,000 and sells it for
$1,500. Which of the following is the best description of her violation if she keeps the money?
a. An agent may take a position that conflicts with the principal only if the principal, with full
knowledge of all the facts, consents.
b. An agent may not represent her principal in a transaction in which the agent has a personal
interest.
c. An agent has a duty not to acquire any financial or material benefits in connection with
transactions conducted on behalf of the principal.
d. All of these are correct. - Answer c. An agent has a duty not to acquire any financial or
material benefits in connection with transactions conducted on behalf of the principal.
A principal has a duty to compensate his or her agent if:
a. the agent breached the duty of obedience.
b. the agent breached the duty of loyalty.
c. it is a gratuitous agency.
d. the agent rendered authorized services - Answer d. the agent rendered authorized
services
All of the following are contractual duties owed by a principal to an agent, except:
a. compensation.
b. reimbursement.
c. indemnification.
d. self-dealing - Answer d. self-dealing
An agent's authority can terminate by:
,a. acts of the parties.
b. operation of law.
c. both acts of the parties and by operation of law.
d. An agent's authority never terminates. - Answer c. both acts of the parties and by
operation of law.
The owner of a business with a buyer terminates an agency without giving notice of the
termination to vendors who have dealt with the agent. Is it reasonable for the vendors to expect
that the agent still has the authority to make contracts that will bind the business?
a. The vendors are reasonable in doing business with the agent until a new agent is hired.
b. The vendors are reasonable in doing business with the agent until they are notified of the
termination of the agency.
c. The vendors are unreasonable in doing business with the agent under any circumstance.
d. None of these are correct. - Answer b. The vendors are reasonable in doing business with
the agent until they are notified of the termination of the agency.
Baxter agrees with Morry to enter into the management of a new apartment building. Morry
appoints Baxter as his manager for one year. During the course of the construction, Baxter
decides to use funds specified for the construction of a garage that Baxter alone has been
interested in completing. Morry is very angry on learning of Baxters' actions and terminates the
agency. Baxter insists that the agency cannot be terminated in this manner. Is Baxter correct?
a. Morry has the power to terminate the agency.
b. Morry cannot terminate the agency under any circumstances.
c. only Baxter can terminate the agency.
d. Morry can terminate the agency, but only after the term has expired. - Answer a. Morry
has the power to terminate the agency.
Belle was seriously ill and feared that she might lapse into a coma or somehow become unable
to speak or act for herself in her medical emergency. She is aware that agents ordinarily lose
their authority to act for principals who become mentally disabled. She nevertheless desires to
have her husband Alan make medical decisions and speak on her behalf. She is particularly
concerned about existing on life support in a persistent and incurable vegetative state. Is there
any action that she might take to enable Alan to act for her?
a. Belle can sign a power of attorney authorizing Alan to act for her.
b. Belle can sign a durable power of attorney with specific power to make decisions on her
behalf.
, c. Belle can handwrite her instructions and keep them in her Bible.
d. Belle can change her Last Will and Testament to communicate her wishes. - Answer b.
Belle can sign a durable power of attorney with specific power to make decisions on her behalf.
Fred is Wilma's agent. Wilma is in the cake baking business. Without Wilma's knowledge, Fred
began going to different civic events and publicly, yet falsely, criticizing the quality of cakes
produced by Wilma's competitors. Several attendees at the events remarked that they would
never shop in Wilma's business again due to Fred's behavior. Which duty has Fred violated?
a. Duty of Good Conduct
b. Duty to Compensate.
c. Duty to Indemnify.
d. None of these answers are correct. - Answer a. Duty of Good Conduct
Fred is Wilma's agent. Fred has violated his fiduciary duty to Wilma, and Wilma sues him. What
type of action may Wilma bring against Fred, depending on the facts of the breach?
a. Breach of Contract
b. An action in tort for losses.
c. An action to recover restitution.
d. All of these answers are correct. - Answer d. All of these answers are correct.
Wilma employs Fred to purchase her a site suitable for her new cake business. Fred owns the
perfect location and sells it to Wilma for a fair price, but does not tell Wilma that he had own
the land. Which statement is correct?
a. Fred has not violated his fiduciary duty to Wilma.
b. Fred has violated his duty not to self-deal with Wilma.
c. Fred has violated his duty to compete.
d. None of these answers are correct. - Answer b. Fred has violated his duty not to self-deal
with Wilma.
Wilma wishes to hire an agent. Though she believes that she can trust someone, based upon
their reputation, she wants to know what the legal obligations are of an agent as a fiduciary.
Which of the following is a legal obligation a fiduciary owes to the principal?
a. Good faith and utmost loyalty to the principal.
b. Duty to compensate
c. Duty to self-deal.
30, 32, 33 Homework and Video
Quizzes (Exam 2) And correct/Verified
Answers.
A power of attorney is a formal manifestation that states an agent's authority. The agent is
known as the:
a. fiduciary.
b. servant.
c. attorney in fact.
d. independent contractor. - Answer c. attorney in fact.
A(n) __________ is a written instrument that expresses the principal's intention that the agent's
authority will not be affected by the principal's subsequent incapacity or that the agent's
authority will become effective upon the principal's subsequent authority.
a. fiduciary
b. Agency by Estoppel
c. Last Will and Testament
d. durable power of attorney - Answer d. durable power of attorney
agency is a consensual relationship that the principal and agent may form by:
a. state common law.
b. contract or agreement.
c. federal or state statutes.
d. administrative law. - Answer b. contract or agreement.
Is the agent subject to liability to her principal for breach of the duty of obedience if she sells
the principal's product on credit in violation of explicit instructions?
a. No, that is a risk that the principal takes in this type of transaction.
b. Yes, but the principal will end up without recourse for the loss.
c. Yes, and she is liable to the principal for any amounts that the purchaser doesn't pay.
d. All of these are correct. - Answer c. Yes, and she is liable to the principal for any amounts
that the purchaser doesn't pay.
Which of the following will terminate a valid durable power of attorney after the principal is
incapacitated?
,a. The death of the principal.
b. Insolvency of the principal.
c. A subsequent durable power of attorney granted by the principal.
d. None of these are correct. - Answer a. The death of the principal.
Which of the following is a major duty, which the agent owes to the principal?
a. Duty to compensate.
b. Duty to act in good faith and with loyalty.
c. Duty to indemnify.
d. Duty to compete. - Answer b. Duty to act in good faith and with loyalty.
If the agent is authorized to sell certain property of her principal for $1,000 and sells it for
$1,500. Which of the following is the best description of her violation if she keeps the money?
a. An agent may take a position that conflicts with the principal only if the principal, with full
knowledge of all the facts, consents.
b. An agent may not represent her principal in a transaction in which the agent has a personal
interest.
c. An agent has a duty not to acquire any financial or material benefits in connection with
transactions conducted on behalf of the principal.
d. All of these are correct. - Answer c. An agent has a duty not to acquire any financial or
material benefits in connection with transactions conducted on behalf of the principal.
A principal has a duty to compensate his or her agent if:
a. the agent breached the duty of obedience.
b. the agent breached the duty of loyalty.
c. it is a gratuitous agency.
d. the agent rendered authorized services - Answer d. the agent rendered authorized
services
All of the following are contractual duties owed by a principal to an agent, except:
a. compensation.
b. reimbursement.
c. indemnification.
d. self-dealing - Answer d. self-dealing
An agent's authority can terminate by:
,a. acts of the parties.
b. operation of law.
c. both acts of the parties and by operation of law.
d. An agent's authority never terminates. - Answer c. both acts of the parties and by
operation of law.
The owner of a business with a buyer terminates an agency without giving notice of the
termination to vendors who have dealt with the agent. Is it reasonable for the vendors to expect
that the agent still has the authority to make contracts that will bind the business?
a. The vendors are reasonable in doing business with the agent until a new agent is hired.
b. The vendors are reasonable in doing business with the agent until they are notified of the
termination of the agency.
c. The vendors are unreasonable in doing business with the agent under any circumstance.
d. None of these are correct. - Answer b. The vendors are reasonable in doing business with
the agent until they are notified of the termination of the agency.
Baxter agrees with Morry to enter into the management of a new apartment building. Morry
appoints Baxter as his manager for one year. During the course of the construction, Baxter
decides to use funds specified for the construction of a garage that Baxter alone has been
interested in completing. Morry is very angry on learning of Baxters' actions and terminates the
agency. Baxter insists that the agency cannot be terminated in this manner. Is Baxter correct?
a. Morry has the power to terminate the agency.
b. Morry cannot terminate the agency under any circumstances.
c. only Baxter can terminate the agency.
d. Morry can terminate the agency, but only after the term has expired. - Answer a. Morry
has the power to terminate the agency.
Belle was seriously ill and feared that she might lapse into a coma or somehow become unable
to speak or act for herself in her medical emergency. She is aware that agents ordinarily lose
their authority to act for principals who become mentally disabled. She nevertheless desires to
have her husband Alan make medical decisions and speak on her behalf. She is particularly
concerned about existing on life support in a persistent and incurable vegetative state. Is there
any action that she might take to enable Alan to act for her?
a. Belle can sign a power of attorney authorizing Alan to act for her.
b. Belle can sign a durable power of attorney with specific power to make decisions on her
behalf.
, c. Belle can handwrite her instructions and keep them in her Bible.
d. Belle can change her Last Will and Testament to communicate her wishes. - Answer b.
Belle can sign a durable power of attorney with specific power to make decisions on her behalf.
Fred is Wilma's agent. Wilma is in the cake baking business. Without Wilma's knowledge, Fred
began going to different civic events and publicly, yet falsely, criticizing the quality of cakes
produced by Wilma's competitors. Several attendees at the events remarked that they would
never shop in Wilma's business again due to Fred's behavior. Which duty has Fred violated?
a. Duty of Good Conduct
b. Duty to Compensate.
c. Duty to Indemnify.
d. None of these answers are correct. - Answer a. Duty of Good Conduct
Fred is Wilma's agent. Fred has violated his fiduciary duty to Wilma, and Wilma sues him. What
type of action may Wilma bring against Fred, depending on the facts of the breach?
a. Breach of Contract
b. An action in tort for losses.
c. An action to recover restitution.
d. All of these answers are correct. - Answer d. All of these answers are correct.
Wilma employs Fred to purchase her a site suitable for her new cake business. Fred owns the
perfect location and sells it to Wilma for a fair price, but does not tell Wilma that he had own
the land. Which statement is correct?
a. Fred has not violated his fiduciary duty to Wilma.
b. Fred has violated his duty not to self-deal with Wilma.
c. Fred has violated his duty to compete.
d. None of these answers are correct. - Answer b. Fred has violated his duty not to self-deal
with Wilma.
Wilma wishes to hire an agent. Though she believes that she can trust someone, based upon
their reputation, she wants to know what the legal obligations are of an agent as a fiduciary.
Which of the following is a legal obligation a fiduciary owes to the principal?
a. Good faith and utmost loyalty to the principal.
b. Duty to compensate
c. Duty to self-deal.
