3 LSTD 2106 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
In an agency relationship, the ________________ authorizes the
__________ to provide services or accomplish some task on
behalf of the _______________and under the ________________
charge.
Answer:
principal, agent, principal, principal
Question:
In an agency relationship, the status of an agent is
determined by the ____between principal and agent.
Answer:
working relationship
Question:
The first step in creating an agency relationship is for the
___________ to manifest an ____________ to form an agency.
Answer:
principal, offer
Question:
When a third party is completely unaware that an agency
relationship exists and believes that the agent is acting on
her own behalf in entering a contract, this is called an
______________.
Answer:
undisclosed agency
Question:
In an undisclosed agency relationship, the _______ is fully
liable to perform the contract.
Answer:
agent
Question:
In the case of the death of a principal, the agency
relationship terminates by _________.
Answer:
operation of law
Question:
_____ arises either when the parties in an agency
relationship expressly agree to create the relationship or
, when the authority is implied based on custom or course
of past dealings.
Answer:
actual authority
Question:
An agent's duty of accounting includes all of the
following except
Answer:
intermingling the principal's funds or property with the agent's own accounts or
possessions.
Question:
The _____ is the centerpiece of a fiduciary relationship
between an agent and a principal because the agent is
obliged to advance the principal's interest over her own
interest.
Answer:
duty of loyalty
Question:
In which of the following cases does Aaron, a principal,
have a duty to reimburse Sarah, an agent?
Answer:
When the expenses incurred by Sarah result from payments made by her for
Aaron's benefit, for which she mistakenly assumes that she had the authority.
Question:
ConElectric Inc. is a consumer electronics company. Paul
is a procurement officer who acts as an agent for
ConElectric to procure components from suppliers.
ConElectric has recently terminated Paul's contract but
has not informed the suppliers. Paul pretends to still be
working for ConElectric, collects the components from
the suppliers, and absconds without paying. In the
context of termination of the agency relationship, which
of the following statements is most likely to be true?
Answer:
ConElectric is liable to the suppliers for Paul's actions because it did not notify the
suppliers about his termination.
Question:
An __________ is not considered an employee and has no
legal protections of employees such as minimum-wage
and overtime-compensation laws.
Answer:
independent contractor agent
CORRECT ANSWERS
Question:
In an agency relationship, the ________________ authorizes the
__________ to provide services or accomplish some task on
behalf of the _______________and under the ________________
charge.
Answer:
principal, agent, principal, principal
Question:
In an agency relationship, the status of an agent is
determined by the ____between principal and agent.
Answer:
working relationship
Question:
The first step in creating an agency relationship is for the
___________ to manifest an ____________ to form an agency.
Answer:
principal, offer
Question:
When a third party is completely unaware that an agency
relationship exists and believes that the agent is acting on
her own behalf in entering a contract, this is called an
______________.
Answer:
undisclosed agency
Question:
In an undisclosed agency relationship, the _______ is fully
liable to perform the contract.
Answer:
agent
Question:
In the case of the death of a principal, the agency
relationship terminates by _________.
Answer:
operation of law
Question:
_____ arises either when the parties in an agency
relationship expressly agree to create the relationship or
, when the authority is implied based on custom or course
of past dealings.
Answer:
actual authority
Question:
An agent's duty of accounting includes all of the
following except
Answer:
intermingling the principal's funds or property with the agent's own accounts or
possessions.
Question:
The _____ is the centerpiece of a fiduciary relationship
between an agent and a principal because the agent is
obliged to advance the principal's interest over her own
interest.
Answer:
duty of loyalty
Question:
In which of the following cases does Aaron, a principal,
have a duty to reimburse Sarah, an agent?
Answer:
When the expenses incurred by Sarah result from payments made by her for
Aaron's benefit, for which she mistakenly assumes that she had the authority.
Question:
ConElectric Inc. is a consumer electronics company. Paul
is a procurement officer who acts as an agent for
ConElectric to procure components from suppliers.
ConElectric has recently terminated Paul's contract but
has not informed the suppliers. Paul pretends to still be
working for ConElectric, collects the components from
the suppliers, and absconds without paying. In the
context of termination of the agency relationship, which
of the following statements is most likely to be true?
Answer:
ConElectric is liable to the suppliers for Paul's actions because it did not notify the
suppliers about his termination.
Question:
An __________ is not considered an employee and has no
legal protections of employees such as minimum-wage
and overtime-compensation laws.
Answer:
independent contractor agent
