BUL 3310 Exam 3 – Bailey questions
with complete 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 - correct answer ✔✔True
In contracts negotiated by an agent who is acting within the scope of his authority for a disclosed
principal, the agent, the principal, and the third party are equally liable on the contract
T/F - correct 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 ___ - correct answer ✔✔Respondeat Superior
In which of the following situations would an employee avoid liability for torts committed while carrying
out his employment obligations? - correct answer ✔✔None of the above; everyone has personal liability
for the torts he commits
Which legal rule will not impose punitive damages on a master for the torts of his servants unless the
master himself took some part in the wrongful action? - correct answer ✔✔Complicity rule
Which of the following is NOT a factor in determining whether a servant was acting within the scope of
his employment? - correct answer ✔✔Was the servant disobeying the instructions of the master when
the tort was committed?
Normally a master is not liable for torts committed by a servant while traveling from his home to the
workplace
T/F - correct answer ✔✔True
Whether or not a servant was acting in the scope of his employment when he injured a third party is a
question of ___ to be decided by the ___ - correct answer ✔✔Fact ; Jury
,The general legal doctrine that holds one person responsible for the torts committed by another because
of the relationship they have to each other is ___ - correct answer ✔✔Vicarious liability
Which legal principle always imposes punitive damages on a master if the wrongful conduct of the
servant in the course of business justifies punitive damages? - correct answer ✔✔Vicarious liability rule
Respondeat superior is a form of vicarious liability
T/F - correct 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 - correct answer ✔✔Family car
When a servant completely abandons the master's work to pursue his own interests, the servant is on
___ - correct 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 - correct 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 independent contractor
T/F - correct answer ✔✔False
The principal is a fiduciary of the agent
T/F - correct answer ✔✔True
An agent is a fiduciary of the principle
T/F - correct answer ✔✔True
,A principal whose identity is known to a third party is a disclosed principal
T/F - correct answer ✔✔True
Undisclosed principals have no liability to third parties for contracts negotiated by their agents
T/F - correct 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 ___ - correct answer
✔✔Undisclosed
A principal whose identity is known to a third party is a ___ principal - correct answer ✔✔Disclosed
A factor is an agent with the special limited authority of procuring a customer so that the principal can
affect a sale or exchange of property
T/F - correct answer ✔✔False
The legal test to determine whether someone is a general agent or a special agent is whether or not the
agent is paid for his services
T/F - correct answer ✔✔False
A store manager is an example of a special agent
T/F - correct answer ✔✔False
A person who enters into a contract with an independent contractor is called a proprietor
T/F - correct answer ✔✔True
A minor may act as an agent for an adult principal
T/F - correct answer ✔✔True
An agent operating under a written power of attorney is called an attorney-at-law
, T/F - correct answer ✔✔False
A person who is given power of attorney is called an ___ - correct answer ✔✔Attorney in fact
The Principal and Agent have ___ relationship with each other - correct 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 buyer. If Larry agrees to
this dual agency, which duty would be most risk violating? - correct answer ✔✔The duty of loyalty
Which of the following is NOT an example of a trade secret - correct answer ✔✔A list of customers that
was punished in an ad in a trade journal
An agent has a duty to obey the principal's instructions unless which of the following is true? - correct
answer ✔✔Both A and B:
- The instructions require the agent to perform duties that are not in the agency agreement
- The instructions are to perform an illegal act
An agent's knowledge is imputed to the principal
T/F - correct answer ✔✔True
Which of the following statements about an agent's duty to inform is false? - correct answer ✔✔The
duty to inform does not apply to gratuitous agents, only to compensated agents
An agent will not be indemnified for injuries caused to third parties if the agent's negligence caused the
injury
T/F - correct answer ✔✔True
If an agency agreement does not state how much an agent is to be paid, what happens? - correct answer
✔✔A court will read in reasonable amount based on the customary rate in the business community
with complete 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 - correct answer ✔✔True
In contracts negotiated by an agent who is acting within the scope of his authority for a disclosed
principal, the agent, the principal, and the third party are equally liable on the contract
T/F - correct 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 ___ - correct answer ✔✔Respondeat Superior
In which of the following situations would an employee avoid liability for torts committed while carrying
out his employment obligations? - correct answer ✔✔None of the above; everyone has personal liability
for the torts he commits
Which legal rule will not impose punitive damages on a master for the torts of his servants unless the
master himself took some part in the wrongful action? - correct answer ✔✔Complicity rule
Which of the following is NOT a factor in determining whether a servant was acting within the scope of
his employment? - correct answer ✔✔Was the servant disobeying the instructions of the master when
the tort was committed?
Normally a master is not liable for torts committed by a servant while traveling from his home to the
workplace
T/F - correct answer ✔✔True
Whether or not a servant was acting in the scope of his employment when he injured a third party is a
question of ___ to be decided by the ___ - correct answer ✔✔Fact ; Jury
,The general legal doctrine that holds one person responsible for the torts committed by another because
of the relationship they have to each other is ___ - correct answer ✔✔Vicarious liability
Which legal principle always imposes punitive damages on a master if the wrongful conduct of the
servant in the course of business justifies punitive damages? - correct answer ✔✔Vicarious liability rule
Respondeat superior is a form of vicarious liability
T/F - correct 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 - correct answer ✔✔Family car
When a servant completely abandons the master's work to pursue his own interests, the servant is on
___ - correct 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 - correct 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 independent contractor
T/F - correct answer ✔✔False
The principal is a fiduciary of the agent
T/F - correct answer ✔✔True
An agent is a fiduciary of the principle
T/F - correct answer ✔✔True
,A principal whose identity is known to a third party is a disclosed principal
T/F - correct answer ✔✔True
Undisclosed principals have no liability to third parties for contracts negotiated by their agents
T/F - correct 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 ___ - correct answer
✔✔Undisclosed
A principal whose identity is known to a third party is a ___ principal - correct answer ✔✔Disclosed
A factor is an agent with the special limited authority of procuring a customer so that the principal can
affect a sale or exchange of property
T/F - correct answer ✔✔False
The legal test to determine whether someone is a general agent or a special agent is whether or not the
agent is paid for his services
T/F - correct answer ✔✔False
A store manager is an example of a special agent
T/F - correct answer ✔✔False
A person who enters into a contract with an independent contractor is called a proprietor
T/F - correct answer ✔✔True
A minor may act as an agent for an adult principal
T/F - correct answer ✔✔True
An agent operating under a written power of attorney is called an attorney-at-law
, T/F - correct answer ✔✔False
A person who is given power of attorney is called an ___ - correct answer ✔✔Attorney in fact
The Principal and Agent have ___ relationship with each other - correct 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 buyer. If Larry agrees to
this dual agency, which duty would be most risk violating? - correct answer ✔✔The duty of loyalty
Which of the following is NOT an example of a trade secret - correct answer ✔✔A list of customers that
was punished in an ad in a trade journal
An agent has a duty to obey the principal's instructions unless which of the following is true? - correct
answer ✔✔Both A and B:
- The instructions require the agent to perform duties that are not in the agency agreement
- The instructions are to perform an illegal act
An agent's knowledge is imputed to the principal
T/F - correct answer ✔✔True
Which of the following statements about an agent's duty to inform is false? - correct answer ✔✔The
duty to inform does not apply to gratuitous agents, only to compensated agents
An agent will not be indemnified for injuries caused to third parties if the agent's negligence caused the
injury
T/F - correct answer ✔✔True
If an agency agreement does not state how much an agent is to be paid, what happens? - correct answer
✔✔A court will read in reasonable amount based on the customary rate in the business community
