ACC 241 CUMMINGS EXAM 1 WINTER
2025 /ACTUAL EXAMS /GRADED A+
1. principal-agent relationship - ANSWER-the relationship between a
principal (employer) and an agent (employee), in which the agent is
expected to act on the principal's behalf
2. Types of Agency Principles - ANSWER-Agency By Agreement
Implied Agency
Agency by Ratification
Apparent Agency/Estoppel
3. Agency by Agreement/Express Agency - ANSWER-When a principal
and agent expressly agree to enter an agency relationship. Has to be
established for a legal purpose (not illegal)
4. Implied Agency - ANSWER-Established through actions that imply an
agreement, even without explicit acknowledgement. If I hire Marcus to
teach me to code and he buys me a Microsoft coding book and
charges me for it, he has implied agency.
5. Agency by Ratification - ANSWER-When a principal accepts the actions
of someone who acted without prior authorization, thereby creating an
agency relationship.
6. Apparent Agency/Agency by Estoppel - ANSWER-Forms when a third
party reasonably believes someone is an agent based on the
principal's representation.
7. Ex: A father sends his son to the dealership to buy a car and tells the
dealership the son is his agent. He tells his son to negotiate for 25,000
, but his son negotiates for 35,000. The dad is bound to the 35,000
under apparent agency.
8. Independent Contractor - ANSWER-A person who provides services to
a principal without being employed or acting as an agent.
- Holds all liability, unless there is a sense of implied agency, or if
they are hired to do a hazardous activity (high liklihood of
danger or explosion)
Duties of an Agent - ANSWER-Duty of Performance
Duty of Notification
Duty of Loyalty
Duty of Obedience
Duty of Accounting
9. Duty of Performance - ANSWER-Obligation to perform the agency
duties to an acceptable standard (do what you were hired to do)
10. Duty of Notification - ANSWER-Requirement to keep the principal
informed about relevant aspects of the agency relationship
11. Duty of Loyalty - ANSWER-Required to act in the best interest of
the principal
- cannot compete with the principals business
- cannot act as an agent for another principal in a deal with the
original principal
- no self dealing
12. Duty of Obedience - ANSWER-Required to obey the lawful
instructions of the principal
13. Duty of Accounting - ANSWER-Responsible for accurate reporting
and management of financial transactions related to the agency
2025 /ACTUAL EXAMS /GRADED A+
1. principal-agent relationship - ANSWER-the relationship between a
principal (employer) and an agent (employee), in which the agent is
expected to act on the principal's behalf
2. Types of Agency Principles - ANSWER-Agency By Agreement
Implied Agency
Agency by Ratification
Apparent Agency/Estoppel
3. Agency by Agreement/Express Agency - ANSWER-When a principal
and agent expressly agree to enter an agency relationship. Has to be
established for a legal purpose (not illegal)
4. Implied Agency - ANSWER-Established through actions that imply an
agreement, even without explicit acknowledgement. If I hire Marcus to
teach me to code and he buys me a Microsoft coding book and
charges me for it, he has implied agency.
5. Agency by Ratification - ANSWER-When a principal accepts the actions
of someone who acted without prior authorization, thereby creating an
agency relationship.
6. Apparent Agency/Agency by Estoppel - ANSWER-Forms when a third
party reasonably believes someone is an agent based on the
principal's representation.
7. Ex: A father sends his son to the dealership to buy a car and tells the
dealership the son is his agent. He tells his son to negotiate for 25,000
, but his son negotiates for 35,000. The dad is bound to the 35,000
under apparent agency.
8. Independent Contractor - ANSWER-A person who provides services to
a principal without being employed or acting as an agent.
- Holds all liability, unless there is a sense of implied agency, or if
they are hired to do a hazardous activity (high liklihood of
danger or explosion)
Duties of an Agent - ANSWER-Duty of Performance
Duty of Notification
Duty of Loyalty
Duty of Obedience
Duty of Accounting
9. Duty of Performance - ANSWER-Obligation to perform the agency
duties to an acceptable standard (do what you were hired to do)
10. Duty of Notification - ANSWER-Requirement to keep the principal
informed about relevant aspects of the agency relationship
11. Duty of Loyalty - ANSWER-Required to act in the best interest of
the principal
- cannot compete with the principals business
- cannot act as an agent for another principal in a deal with the
original principal
- no self dealing
12. Duty of Obedience - ANSWER-Required to obey the lawful
instructions of the principal
13. Duty of Accounting - ANSWER-Responsible for accurate reporting
and management of financial transactions related to the agency
