BUL 5810 MAIN EXAMINATION SETS UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔Belle was seriously ill and feared that she might lapse into a coma or somehow
become unable to speak or act for herself in her medical emergency. She is aware that
agents ordinarily lose their authority to act for principals who become mentally disabled.
She nevertheless desires to have her husband Alan make medical decisions and speak
on her behalf. She is particularly concerned about existing on life support in a persistent
and incurable vegetative state. Is there any action that she might take to enable Alan to
act for her?
a. Belle can sign a power of attorney authorizing Alan to act for her.
b. Belle can sign a durable power of attorney with specific power to make decisions on
her behalf.
c. Belle can handwrite her instructions and keep them in her Bible.
d. Belle can change her Last Will and Testament to communicate her wishes. - ✔✔Belle
can sign a durable power of attorney with specific power to make decisions on her
behalf.
✔✔Fred is Wilma's agent. Wilma is in the cake baking business. Without Wilma's
knowledge, Fred began going to different civic events and publicly, yet falsely, criticizing
the quality of cakes produced by Wilma's competitors. Several attendees at the events
remarked that they would never shop in Wilma's business again due to Fred's behavior.
Which duty has Fred violated?
a. Duty of Good Conduct
b. Duty to Compensate.
c. Duty to Indemnify.
d. None of these answers are correct. - ✔✔Duty of Good Conduct
✔✔Fred is Wilma's agent. Fred has violated his fiduciary duty to Wilma, and Wilma sues
him. What type of action may Wilma bring against Fred, depending on the facts of the
breach?
a. Breach of Contract
b. An action in tort for losses.
c. An action to recover restitution.
d. All of these answers are correct. - ✔✔All of these answers are correct.
✔✔Wilma employs Fred to purchase her a site suitable for her new cake business. Fred
owns the perfect location and sells it to Wilma for a fair price, but does not tell Wilma
that he had own the land. Which statement is correct?
a. Fred has not violated his fiduciary duty to Wilma.
b. Fred has violated his duty not to self-deal with Wilma.
,c. Fred has violated his duty to compete.
d. None of these answers are correct. - ✔✔Fred has violated his duty not to self-deal
with Wilma.
✔✔Wilma wishes to hire an agent. Though she believes that she can trust someone,
based upon their reputation, she wants to know what the legal obligations are of an
agent as a fiduciary. Which of the following is a legal obligation a fiduciary owes to the
principal?
a. Good faith and utmost loyalty to the principal.
b. Duty to compensate
c. Duty to self-deal.
d. None of these answers are correct. - ✔✔Good faith and utmost loyalty to the
principal.
✔✔Barney is Betty's gratuitous agent. One day, Barney tells Betty: "I'm through with
you. I'm no longer your agent." After the statement, is Barney Betty's agent?
a. No, Barney, as Betty's agent, renounced his agency and ended the relationship.
b. Yes, because Betty must agree.
c. Yes, because Barney is contractually obligated to be Betty's agent.
d. None of these answers are correct. - ✔✔No, Barney, as Betty's agent, renounced his
agency and ended the relationship.
✔✔George holds a valid durable power of attorney for his father, who is incapacitated.
Which of the following events will terminate the durable power of attorney.
a. The death of his father.
b. Insolvency of his father.
c. A subsequent durable power of attorney granted by this father.
d. None of these are correct. - ✔✔The death of his father.
✔✔Mary is Eddie's principal. When does Mary owe Eddie a duty of compensation?
a. If Eddie breaches his duty of obedience.
b. If Eddie breaches his duty of loyalty.
c. So long as Eddie's agency is a gratuitous one.
d. When Eddie renders authorized services. - ✔✔When Eddie renders authorized
services.
✔✔When the court ruled on Detroit Lions, Inc. v. Argovitz what issue did the court
address?
a. The court reviewed the clauses of each football contract to see which was in Sims'
best interests.
,b. The court examined whether Argovitz, as an agent for Sims, violated his fiduciary
duty to Sims in contract negotiations.
c. The court assessed the wording of the Lions contract for an escape clause.
d. The court analyzed the relative the cost of living in Houston vs. that of living in
Detroit. - ✔✔The court examined whether Argovitz, as an agent for Sims, violated his
fiduciary duty to Sims in contract negotiations.
✔✔A case in the chapter, Gaddy v. Douglass, brought what issue before the court?
a. Whether a principal can revoke a valid durable power of attorney after she loses
contractual capacity.
b. Whether the 1999 durable power of attorney was executed in the correct format.
c. Whether Dr. Gaddy was the right person to have been appointed attorney-in-fact
under the original durable power of attorney.
d. Whether Ms. M's relatives coerced her into revoking the 1988 durable power of
attorney. - ✔✔Whether a principal can revoke a valid durable power of attorney after
she loses contractual capacity.
✔✔The issue before the court in the Miller v. McDonald's Corporation case, was:
a. whether Joni Miller was somewhat negligent for failing to find the gemstone in her Big
Mac before she was hurt by it.
b. whether 3K was solely liable for injuries caused at the McDonald's where Joni Miller
was injured.
c. whether McDonald's was vicariously liable for injuries caused at a franchised
restaurant (operated by 3K).
d. whether or not one should expect to find a stone in a sandwich at McDonald's. -
✔✔whether McDonald's was vicariously liable for injuries caused at a franchised
restaurant (operated by 3K).
✔✔An agent making a proper contract with a third person on behalf of an undisclosed
principal:
a. has no personal liability on the contract.
b. is liable only to the principal on the contract.
c. is liable only to the third party on the contract.
d. is personally liable to both the principal and the third person on the contract. - ✔✔is
personally liable to both the principal and the third person on the contract.
✔✔If an agent exceeds his actual and apparent authority, the contract:
a. binds the principal but not the agent.
b. does not bind the principal.
c. binds the principal and the agent.
d. None of these are correct. - ✔✔does not bind the principal.
, ✔✔In which of the following scenarios is the agent exposed to the least risk of liability?
a. Disclosed principal and authorized contract.
b. Undisclosed principal and authorized contract.
c. Partially disclosed principal and authorized contract.
d. Authorized receipt of money from third person remitted to disclosed principal. -
✔✔Disclosed principal and authorized contract.
✔✔The liability of the agent to the third person depends on:
a. agents can never unintentionally make themselves liable.
b. agents are never liable to the third party.
c. agents are always liable to the third party.
d. the existence of authority and the manner of executing the contract - ✔✔the
existence of authority and the manner of executing the contract
✔✔An agent is liable for harm caused to third persons as follows:
a. liable for both the tort and the crime.
b. generally liable for the crime but not the tort, assuming that the tort was committed to
advance the interests of the principal.
c. generally liable for the crime but not the tort.
d. not liable for the tort or the crime, assuming both were committed to advance the
interests of the principal. - ✔✔liable for both the tort and the crime.
✔✔The liability of a buyer for the purchase price of goods is:
a. terminated when the order is placed.
b. terminated when the buyer gave the buyer's agent purchase price.
c. not terminated until the buyer pays twice for the object.
d. not terminated by the fact that the buyer gave the buyer's agent the purchase price to
remit to the seller. - ✔✔not terminated by the fact that the buyer gave the buyer's agent
the purchase price to remit to the seller.
✔✔The principal is bound by knowledge or notice of any fact that is acquired by an
agent while acting within the scope of:
a. collusion with a third party.
b. apparent or actual authority.
c. acting adversely to the principal's interest.
d. None of these are correct. - ✔✔apparent or actual authority.
✔✔The rule of law imposing vicarious liability on an innocent employer for the wrong of
an employee is known as:
QUESTIONS AND ANSWERS GRADED A+
✔✔Belle was seriously ill and feared that she might lapse into a coma or somehow
become unable to speak or act for herself in her medical emergency. She is aware that
agents ordinarily lose their authority to act for principals who become mentally disabled.
She nevertheless desires to have her husband Alan make medical decisions and speak
on her behalf. She is particularly concerned about existing on life support in a persistent
and incurable vegetative state. Is there any action that she might take to enable Alan to
act for her?
a. Belle can sign a power of attorney authorizing Alan to act for her.
b. Belle can sign a durable power of attorney with specific power to make decisions on
her behalf.
c. Belle can handwrite her instructions and keep them in her Bible.
d. Belle can change her Last Will and Testament to communicate her wishes. - ✔✔Belle
can sign a durable power of attorney with specific power to make decisions on her
behalf.
✔✔Fred is Wilma's agent. Wilma is in the cake baking business. Without Wilma's
knowledge, Fred began going to different civic events and publicly, yet falsely, criticizing
the quality of cakes produced by Wilma's competitors. Several attendees at the events
remarked that they would never shop in Wilma's business again due to Fred's behavior.
Which duty has Fred violated?
a. Duty of Good Conduct
b. Duty to Compensate.
c. Duty to Indemnify.
d. None of these answers are correct. - ✔✔Duty of Good Conduct
✔✔Fred is Wilma's agent. Fred has violated his fiduciary duty to Wilma, and Wilma sues
him. What type of action may Wilma bring against Fred, depending on the facts of the
breach?
a. Breach of Contract
b. An action in tort for losses.
c. An action to recover restitution.
d. All of these answers are correct. - ✔✔All of these answers are correct.
✔✔Wilma employs Fred to purchase her a site suitable for her new cake business. Fred
owns the perfect location and sells it to Wilma for a fair price, but does not tell Wilma
that he had own the land. Which statement is correct?
a. Fred has not violated his fiduciary duty to Wilma.
b. Fred has violated his duty not to self-deal with Wilma.
,c. Fred has violated his duty to compete.
d. None of these answers are correct. - ✔✔Fred has violated his duty not to self-deal
with Wilma.
✔✔Wilma wishes to hire an agent. Though she believes that she can trust someone,
based upon their reputation, she wants to know what the legal obligations are of an
agent as a fiduciary. Which of the following is a legal obligation a fiduciary owes to the
principal?
a. Good faith and utmost loyalty to the principal.
b. Duty to compensate
c. Duty to self-deal.
d. None of these answers are correct. - ✔✔Good faith and utmost loyalty to the
principal.
✔✔Barney is Betty's gratuitous agent. One day, Barney tells Betty: "I'm through with
you. I'm no longer your agent." After the statement, is Barney Betty's agent?
a. No, Barney, as Betty's agent, renounced his agency and ended the relationship.
b. Yes, because Betty must agree.
c. Yes, because Barney is contractually obligated to be Betty's agent.
d. None of these answers are correct. - ✔✔No, Barney, as Betty's agent, renounced his
agency and ended the relationship.
✔✔George holds a valid durable power of attorney for his father, who is incapacitated.
Which of the following events will terminate the durable power of attorney.
a. The death of his father.
b. Insolvency of his father.
c. A subsequent durable power of attorney granted by this father.
d. None of these are correct. - ✔✔The death of his father.
✔✔Mary is Eddie's principal. When does Mary owe Eddie a duty of compensation?
a. If Eddie breaches his duty of obedience.
b. If Eddie breaches his duty of loyalty.
c. So long as Eddie's agency is a gratuitous one.
d. When Eddie renders authorized services. - ✔✔When Eddie renders authorized
services.
✔✔When the court ruled on Detroit Lions, Inc. v. Argovitz what issue did the court
address?
a. The court reviewed the clauses of each football contract to see which was in Sims'
best interests.
,b. The court examined whether Argovitz, as an agent for Sims, violated his fiduciary
duty to Sims in contract negotiations.
c. The court assessed the wording of the Lions contract for an escape clause.
d. The court analyzed the relative the cost of living in Houston vs. that of living in
Detroit. - ✔✔The court examined whether Argovitz, as an agent for Sims, violated his
fiduciary duty to Sims in contract negotiations.
✔✔A case in the chapter, Gaddy v. Douglass, brought what issue before the court?
a. Whether a principal can revoke a valid durable power of attorney after she loses
contractual capacity.
b. Whether the 1999 durable power of attorney was executed in the correct format.
c. Whether Dr. Gaddy was the right person to have been appointed attorney-in-fact
under the original durable power of attorney.
d. Whether Ms. M's relatives coerced her into revoking the 1988 durable power of
attorney. - ✔✔Whether a principal can revoke a valid durable power of attorney after
she loses contractual capacity.
✔✔The issue before the court in the Miller v. McDonald's Corporation case, was:
a. whether Joni Miller was somewhat negligent for failing to find the gemstone in her Big
Mac before she was hurt by it.
b. whether 3K was solely liable for injuries caused at the McDonald's where Joni Miller
was injured.
c. whether McDonald's was vicariously liable for injuries caused at a franchised
restaurant (operated by 3K).
d. whether or not one should expect to find a stone in a sandwich at McDonald's. -
✔✔whether McDonald's was vicariously liable for injuries caused at a franchised
restaurant (operated by 3K).
✔✔An agent making a proper contract with a third person on behalf of an undisclosed
principal:
a. has no personal liability on the contract.
b. is liable only to the principal on the contract.
c. is liable only to the third party on the contract.
d. is personally liable to both the principal and the third person on the contract. - ✔✔is
personally liable to both the principal and the third person on the contract.
✔✔If an agent exceeds his actual and apparent authority, the contract:
a. binds the principal but not the agent.
b. does not bind the principal.
c. binds the principal and the agent.
d. None of these are correct. - ✔✔does not bind the principal.
, ✔✔In which of the following scenarios is the agent exposed to the least risk of liability?
a. Disclosed principal and authorized contract.
b. Undisclosed principal and authorized contract.
c. Partially disclosed principal and authorized contract.
d. Authorized receipt of money from third person remitted to disclosed principal. -
✔✔Disclosed principal and authorized contract.
✔✔The liability of the agent to the third person depends on:
a. agents can never unintentionally make themselves liable.
b. agents are never liable to the third party.
c. agents are always liable to the third party.
d. the existence of authority and the manner of executing the contract - ✔✔the
existence of authority and the manner of executing the contract
✔✔An agent is liable for harm caused to third persons as follows:
a. liable for both the tort and the crime.
b. generally liable for the crime but not the tort, assuming that the tort was committed to
advance the interests of the principal.
c. generally liable for the crime but not the tort.
d. not liable for the tort or the crime, assuming both were committed to advance the
interests of the principal. - ✔✔liable for both the tort and the crime.
✔✔The liability of a buyer for the purchase price of goods is:
a. terminated when the order is placed.
b. terminated when the buyer gave the buyer's agent purchase price.
c. not terminated until the buyer pays twice for the object.
d. not terminated by the fact that the buyer gave the buyer's agent the purchase price to
remit to the seller. - ✔✔not terminated by the fact that the buyer gave the buyer's agent
the purchase price to remit to the seller.
✔✔The principal is bound by knowledge or notice of any fact that is acquired by an
agent while acting within the scope of:
a. collusion with a third party.
b. apparent or actual authority.
c. acting adversely to the principal's interest.
d. None of these are correct. - ✔✔apparent or actual authority.
✔✔The rule of law imposing vicarious liability on an innocent employer for the wrong of
an employee is known as:
