ACC 241 BYU FINAL EXAM 202 Questions with Verified
Answers
Lesson 16: Self Check
Explain how the facts in Ginn must change for a court to conclude that there was
an agency relationship between the unknown patron and the nightclub. -
CORRECT ANSWER Note the definition of agency earlier in this chapter. It requires
"assent" (agreement) on the part of the principal (the manager) and the patron
(agent) that the agent will act for the principal. There are no magic words, but the
following would suffice: the manager says, "John, help me get this drunk out of
here," and the patron responds, "Okay."
Lesson 16: Self Check - CORRECT ANSWER
Lesson 16: Self Check
What is the difference between implied authority and apparent authority? (This is
a difficult question, and if you understand the subtle distinction between the two,
you are starting to understand the matters discussed in this chapter.) - CORRECT
ANSWER Implied authority is real authority, but apparent authority is not. Implied
authority comes from the position that the agent holds while apparent authority
arises out of representations that a principal makes to a third party.
Lesson 16: Self Check
In the Alberty-Velez v. Corporacion de Puerto Rico case, the court obviously found
it significant that Ms. Alberty-Velez (1) provided her own tools, (2) received a
lump sum for each performance, and (3) did not receive benefits. Why did the
court consider these items (among other items) important in deciding whether
she was an independent contractor? - CORRECT ANSWER Normally, an employee
(for example, an employee in a bakery) is (1) provided all necessary tools and
products, (2) paid by the hour, and (3) Internal Tax, Social Security, and benefits
,withholding is provided. These items are evidence of an employee-employer
relationship, not an independent contractor relationship The fact that these items
were not applied to Ms. Alberty-Velez suggests her independent contractor
status.
Lesson 16: Self Check
Explain (1) what is meant by duty of loyalty, and (2) who owes the duty: principal
or agent? - CORRECT ANSWER A duty of loyalty is a duty in which a person owes a
responsibility of trust and confidence to another and must put that other person's
interests before his own. This duty is owed by an agent to a principal.
Lesson 16: Self Check
To avoid liability for various claims, a business enterprise will often claim that a
person working for it is an independent contractor and not an agent. Summarize
the factors (they are discussed in both of the preceding cases) that are considered
by courts to decide whether a particular person is an independent contractor or
an agent. - CORRECT ANSWER his list is from the Eisenberg decision: "(1) the
hiring party's right to control the manner and means by which the product is
accomplished; (2) the skill required; (3) the source of the instrumentalities and
tools; (4) the location of the work; (5) the duration of the relationship between
the parties; (6) whether the hiring party has the right to assign additional projects
to the hired party; (7) the extent of the hired party's discretion over when and
how to long to work; (8) the method of payment; (9) the hired party's role in
hiring and paying assistants; (10) whether the work is part of the regular business
of the hiring party; (11) whether the hiring party is in business; (12) the provision
of employee benefits; and (13) the tax treatment of the hired party."
Lesson 16: Self Check
As we will learn later in more detail, many people resist being described as a
principal. Why is this so? As described in the lesson, why does a principal often
resist that description? - CORRECT ANSWER A principal often tries to avoid being
described as a principal because in an agency relationship the principal is liable for
the wrongdoing of his or her agent.
,Lesson 16: Quiz
In an agency relationship, there are the following duties: (1) loyalty, (2)
performance, (3) notification, and (4) accountability. These duties must be
performed by
the principal.
the agent.
neither of these is correct. - CORRECT ANSWER the agent.
As noted in the lesson, the duties of loyalty, performance, notification, and
accountability apply to the agent in behalf of the principal.
Lesson 16: Quiz
Milly works for Jed. Jed withholds money for state and federal taxes and pays
Milly each 2 weeks without regard to whether a particular job is finished or not
finished. This action by Jed suggests which of the following?
that Milly is the principal in her relationship with Jed
that Milly is an employee
that Milly is an independent contractor - CORRECT ANSWER that Milly is an
employee
An independent contractor is paid by the job, and tax money is not withheld.
Since neither circumstance applies to Milly, she is an employee.
Lesson 16: Quiz
Which of the following is correct?
A principal owes a duty of loyalty to his agents.
An agent owes a duty of loyalty to his principal.
, Neither of these is correct. - CORRECT ANSWER An agent owes a duty of loyalty to
his principal.
An agent owes a duty of loyalty to his principal, but a principal does not owe a
duty of loyalty to his agents.
Lesson 16: Quiz
In Ginn v. Renaldo, Inc. (discussed in this lesson), suppose that the manager called
out, "Help me!" and Joe stepped forward and slammed the door, causing the
injury to Ginn. If there was an agency relationship between the nightclub and Joe
(the person who slammed the door), that agency relationship would be best
described as
an express agency.
an implied agency.
a relationship based on apparent authority.
none of these. - CORRECT ANSWER an implied agency.
The opinion of the court is clear that it is considering whether there existed
"agency by implication" or "agency by ratification."
Lesson 16: Quiz
Respondeat superior applies to which of the following?
A principal and agent relationship created by express agreement.
A principal and agent relationship based on implied agency.
A principal and agent relationship based on apparent authority.
All of these are correct. - CORRECT ANSWER All of these are correct.
Answers
Lesson 16: Self Check
Explain how the facts in Ginn must change for a court to conclude that there was
an agency relationship between the unknown patron and the nightclub. -
CORRECT ANSWER Note the definition of agency earlier in this chapter. It requires
"assent" (agreement) on the part of the principal (the manager) and the patron
(agent) that the agent will act for the principal. There are no magic words, but the
following would suffice: the manager says, "John, help me get this drunk out of
here," and the patron responds, "Okay."
Lesson 16: Self Check - CORRECT ANSWER
Lesson 16: Self Check
What is the difference between implied authority and apparent authority? (This is
a difficult question, and if you understand the subtle distinction between the two,
you are starting to understand the matters discussed in this chapter.) - CORRECT
ANSWER Implied authority is real authority, but apparent authority is not. Implied
authority comes from the position that the agent holds while apparent authority
arises out of representations that a principal makes to a third party.
Lesson 16: Self Check
In the Alberty-Velez v. Corporacion de Puerto Rico case, the court obviously found
it significant that Ms. Alberty-Velez (1) provided her own tools, (2) received a
lump sum for each performance, and (3) did not receive benefits. Why did the
court consider these items (among other items) important in deciding whether
she was an independent contractor? - CORRECT ANSWER Normally, an employee
(for example, an employee in a bakery) is (1) provided all necessary tools and
products, (2) paid by the hour, and (3) Internal Tax, Social Security, and benefits
,withholding is provided. These items are evidence of an employee-employer
relationship, not an independent contractor relationship The fact that these items
were not applied to Ms. Alberty-Velez suggests her independent contractor
status.
Lesson 16: Self Check
Explain (1) what is meant by duty of loyalty, and (2) who owes the duty: principal
or agent? - CORRECT ANSWER A duty of loyalty is a duty in which a person owes a
responsibility of trust and confidence to another and must put that other person's
interests before his own. This duty is owed by an agent to a principal.
Lesson 16: Self Check
To avoid liability for various claims, a business enterprise will often claim that a
person working for it is an independent contractor and not an agent. Summarize
the factors (they are discussed in both of the preceding cases) that are considered
by courts to decide whether a particular person is an independent contractor or
an agent. - CORRECT ANSWER his list is from the Eisenberg decision: "(1) the
hiring party's right to control the manner and means by which the product is
accomplished; (2) the skill required; (3) the source of the instrumentalities and
tools; (4) the location of the work; (5) the duration of the relationship between
the parties; (6) whether the hiring party has the right to assign additional projects
to the hired party; (7) the extent of the hired party's discretion over when and
how to long to work; (8) the method of payment; (9) the hired party's role in
hiring and paying assistants; (10) whether the work is part of the regular business
of the hiring party; (11) whether the hiring party is in business; (12) the provision
of employee benefits; and (13) the tax treatment of the hired party."
Lesson 16: Self Check
As we will learn later in more detail, many people resist being described as a
principal. Why is this so? As described in the lesson, why does a principal often
resist that description? - CORRECT ANSWER A principal often tries to avoid being
described as a principal because in an agency relationship the principal is liable for
the wrongdoing of his or her agent.
,Lesson 16: Quiz
In an agency relationship, there are the following duties: (1) loyalty, (2)
performance, (3) notification, and (4) accountability. These duties must be
performed by
the principal.
the agent.
neither of these is correct. - CORRECT ANSWER the agent.
As noted in the lesson, the duties of loyalty, performance, notification, and
accountability apply to the agent in behalf of the principal.
Lesson 16: Quiz
Milly works for Jed. Jed withholds money for state and federal taxes and pays
Milly each 2 weeks without regard to whether a particular job is finished or not
finished. This action by Jed suggests which of the following?
that Milly is the principal in her relationship with Jed
that Milly is an employee
that Milly is an independent contractor - CORRECT ANSWER that Milly is an
employee
An independent contractor is paid by the job, and tax money is not withheld.
Since neither circumstance applies to Milly, she is an employee.
Lesson 16: Quiz
Which of the following is correct?
A principal owes a duty of loyalty to his agents.
An agent owes a duty of loyalty to his principal.
, Neither of these is correct. - CORRECT ANSWER An agent owes a duty of loyalty to
his principal.
An agent owes a duty of loyalty to his principal, but a principal does not owe a
duty of loyalty to his agents.
Lesson 16: Quiz
In Ginn v. Renaldo, Inc. (discussed in this lesson), suppose that the manager called
out, "Help me!" and Joe stepped forward and slammed the door, causing the
injury to Ginn. If there was an agency relationship between the nightclub and Joe
(the person who slammed the door), that agency relationship would be best
described as
an express agency.
an implied agency.
a relationship based on apparent authority.
none of these. - CORRECT ANSWER an implied agency.
The opinion of the court is clear that it is considering whether there existed
"agency by implication" or "agency by ratification."
Lesson 16: Quiz
Respondeat superior applies to which of the following?
A principal and agent relationship created by express agreement.
A principal and agent relationship based on implied agency.
A principal and agent relationship based on apparent authority.
All of these are correct. - CORRECT ANSWER All of these are correct.
