BUL 3310 Exam 3 Questions with
Correct Solutions
A master can normally avoid liability for damages caused by a servant if he can show that the servant
misunderstood his instructions
T/F - Answer-True
In contracts negotiated by an agent who is acting within the scope of his authority fo r a disclose d
principal, the agent, the principal, and the third party are equally liable on the cont ract
T/F - Answer-False
The legal doctrine that holds the master liable for the torts committed by a servant while acting within
the scope of this employment is ___ - Answer-Respondeat Superior
In which of the following situations would an employee avoid liability for torts committe d while ca rrying
out his employment obligations? - Answer-None of the above; everyone has pe rsonal liability fo r the
torts he commits
Which legal rule will not impose punitive damages on a master for the torts of his se rvants unless the
master himself took some part in the wrongful action? - Answer-Complicity rule
,Which of the following is NOT a factor in determining whether a servant was acting within the scope of
his employment? - Answer-Was the servant disobeying the instructions of the maste r when the to rt
was committed?
Normally a master is not liable for torts committed by a servant while traveling from his home to the
workplace
T/F - Answer-True
Whether or not a servant was acting in the scope of his employment when he inju re d a thi rd pa rty is a
question of ___ to be decided by the ___ - Answer-Fact ; Jury
The general legal doctrine that holds one person responsible for the torts committe d by anothe r
because of the relationship they have to each other is ___ - Answer-Vicarious liability
Which legal principle always imposes punitive damages on a master if the w rongful con duct of the
servant in the course of business justifies punitive damages? - Answer-Vicarious liability rule
Respondeat superior is a form of vicarious liability
T/F - Answer-True
In some states, a parent-owner is liable for any damages caused by a family member operating the
vehicle. This is the ___ doctrine - Answer-Family car
When a servant completely abandons the master's work to pursue his own inte rests, the se rvant is on
___ - Answer-A frolic
Masters and servants ONLY have joint liability for torts committed by the servant in the strict course of
his employment
T/F - Answer-False
,Assume that you hire an independent contractor to transport hazardous chemicals for your company. If
he negligently causes damages to a third party while carrying out the job, you will not be liable because
of his status as an in dependent cont racto r
T/F - Answer-False
The pr inc ipa l is a fi d uc ia r y of the agent
T/F - Answer-True
An agent is a fi d uc ia r y of the pr inc ip le
T/F - Answer-True
A pr inc ipa l whose i d enti t y is known to a th i rd party is a d isc lose d pr inc ipa l
T/F - Answer-True
Undisclosed principals have no liability to third parties for contracts negotiate d by thei r agents
T/F - Answer-False
If a third party does not know that he is dealing with an agent and believes that the agent is acting on
his own behalf and will perform on the contract, the principal in this situation is ___ - Answer-
Undisclosed
A principal whose identity is known to a third party is a ___ principal - Answer-Disclose d
A factor is an agent with the special limited authority of procuring a customer so that the p rincipal can
affect a sale or exchange of property
T/F - Answer-False
, The legal test to determine whether someone is a general agent or a special agent is whethe r o r not the
agent is pai d fo r his services
T/F - Answer-False
A store manager is an example of a special agent
T/F - Answer-False
A person whoenter s into a cont ract with an in depen dent cont racto r is cal l e d a propr ieto r
T/F - Answer-True
A minor may act as an agent for an adult principal
T/F - Answer-True
An agent operati ng under a writt en power of att o rney is cal l e d an att o rney- at- law
T/F - Answer-False
A person who is given power of attorney is called an ___ - Answer-Attorney in fact
The Principal and Agent have ___ relationship with each other - Answer-A fiduciary
Sam is retiring and selling his business to Ed, an employee. They want Larry Lawyer to draw up a sales
contract that protects both Sam's interests as the seller and Ed's interests as the buye r. If La rry ag rees to
this dual agency, which duty would be most risk violating? - Answer-The duty of loyalty
Which of the following is NOT an example of a trade secret - Answer-A list of customers that was
punished in an ad in a trade journal
Correct Solutions
A master can normally avoid liability for damages caused by a servant if he can show that the servant
misunderstood his instructions
T/F - Answer-True
In contracts negotiated by an agent who is acting within the scope of his authority fo r a disclose d
principal, the agent, the principal, and the third party are equally liable on the cont ract
T/F - Answer-False
The legal doctrine that holds the master liable for the torts committed by a servant while acting within
the scope of this employment is ___ - Answer-Respondeat Superior
In which of the following situations would an employee avoid liability for torts committe d while ca rrying
out his employment obligations? - Answer-None of the above; everyone has pe rsonal liability fo r the
torts he commits
Which legal rule will not impose punitive damages on a master for the torts of his se rvants unless the
master himself took some part in the wrongful action? - Answer-Complicity rule
,Which of the following is NOT a factor in determining whether a servant was acting within the scope of
his employment? - Answer-Was the servant disobeying the instructions of the maste r when the to rt
was committed?
Normally a master is not liable for torts committed by a servant while traveling from his home to the
workplace
T/F - Answer-True
Whether or not a servant was acting in the scope of his employment when he inju re d a thi rd pa rty is a
question of ___ to be decided by the ___ - Answer-Fact ; Jury
The general legal doctrine that holds one person responsible for the torts committe d by anothe r
because of the relationship they have to each other is ___ - Answer-Vicarious liability
Which legal principle always imposes punitive damages on a master if the w rongful con duct of the
servant in the course of business justifies punitive damages? - Answer-Vicarious liability rule
Respondeat superior is a form of vicarious liability
T/F - Answer-True
In some states, a parent-owner is liable for any damages caused by a family member operating the
vehicle. This is the ___ doctrine - Answer-Family car
When a servant completely abandons the master's work to pursue his own inte rests, the se rvant is on
___ - Answer-A frolic
Masters and servants ONLY have joint liability for torts committed by the servant in the strict course of
his employment
T/F - Answer-False
,Assume that you hire an independent contractor to transport hazardous chemicals for your company. If
he negligently causes damages to a third party while carrying out the job, you will not be liable because
of his status as an in dependent cont racto r
T/F - Answer-False
The pr inc ipa l is a fi d uc ia r y of the agent
T/F - Answer-True
An agent is a fi d uc ia r y of the pr inc ip le
T/F - Answer-True
A pr inc ipa l whose i d enti t y is known to a th i rd party is a d isc lose d pr inc ipa l
T/F - Answer-True
Undisclosed principals have no liability to third parties for contracts negotiate d by thei r agents
T/F - Answer-False
If a third party does not know that he is dealing with an agent and believes that the agent is acting on
his own behalf and will perform on the contract, the principal in this situation is ___ - Answer-
Undisclosed
A principal whose identity is known to a third party is a ___ principal - Answer-Disclose d
A factor is an agent with the special limited authority of procuring a customer so that the p rincipal can
affect a sale or exchange of property
T/F - Answer-False
, The legal test to determine whether someone is a general agent or a special agent is whethe r o r not the
agent is pai d fo r his services
T/F - Answer-False
A store manager is an example of a special agent
T/F - Answer-False
A person whoenter s into a cont ract with an in depen dent cont racto r is cal l e d a propr ieto r
T/F - Answer-True
A minor may act as an agent for an adult principal
T/F - Answer-True
An agent operati ng under a writt en power of att o rney is cal l e d an att o rney- at- law
T/F - Answer-False
A person who is given power of attorney is called an ___ - Answer-Attorney in fact
The Principal and Agent have ___ relationship with each other - Answer-A fiduciary
Sam is retiring and selling his business to Ed, an employee. They want Larry Lawyer to draw up a sales
contract that protects both Sam's interests as the seller and Ed's interests as the buye r. If La rry ag rees to
this dual agency, which duty would be most risk violating? - Answer-The duty of loyalty
Which of the following is NOT an example of a trade secret - Answer-A list of customers that was
punished in an ad in a trade journal
