QUESTION 16 If an agent is authorized to buy a car for her principal for $40,000
ID: 377429 • Letter: Q
Question
QUESTION 16
If an agent is authorized to buy a car for her principal for $40,000 but is able to buy it for $35,000:
the agent must account to the principal for the $5,000 not spent.
the agent must give the $5,000 to the seller of the car.
the agent is legally entitled to keep the $5,000 as a bonus.
the principal can legally fire the agent for failing to act in the principal’s best interest.
4 points
QUESTION 17
Who of the following is an independent contractor?
a lawyer hired on a one-time basis to represent OIT in a legal action.
a student taking a course at OIT.
a professor hired to teach for a year at OIT.
a US Postal Service driver delivering mail to OIT.
4 points
QUESTION 18
A principal is liable for his agent’s ________________ under the doctrine of respondeat superior
contracts negotiated outside the scope of his authority.
torts committed outside the scope of his authority.
torts committed within the scope of his authority.
contracts negotiated within the scope of his authority.
4 points
QUESTION 19
Under the doctrine of employment at will:
an employer is prohibited from firing any employee who is in a "protected class" even if the employee fails to perform the work as specified.
an employee must give sufficient notice to the employer before terminating employment.
an employee can quit or be fired at any time with or without a reason.
an employer can only fire an employee for "cause".
4 points
QUESTION 20
In the absence of any specific agreements, each partner in a general partnership has:
an equal right in managing the partnership.
no authority to contract on behalf of the partnership.
a legal right to compete with the partnership for personal gain.
limited personal liability.
a.the agent must account to the principal for the $5,000 not spent.
b.the agent must give the $5,000 to the seller of the car.
c.the agent is legally entitled to keep the $5,000 as a bonus.
d.the principal can legally fire the agent for failing to act in the principal’s best interest.
Explanation / Answer
QUESTION 16
If an agent is authorized to buy a car for her principal for $40,000 but is able to buy it for $35,000:
Answer- a-the agent must account to the principal for the $5,000 not spent.
An agent is a person appointed or employed by the principal to act or represent the principal to a third party. One of the main duties of the agent is to carry out the mandate of the principal. During a transaction or business dealing, the agent should act to the principal’s best interest. The agent should use the negotiation skills and diligence on behalf of the principal to the greatest advantage of the principal. The agent should act within the limits of the authority given to him. Since this example does not have the authority mentioned explicitly, the authority of the agent to act on behalf of the principal to the principal’s greatest advantage is implied authority. Implied authority is necessary for the effective performance of the agent’s duties. The agent has saved $5000 for the principal and this amount cannot be given to the seller by the agent nor can the agent take it as bonus nor can the agent be fired as he acted to the greatest advantage of the principal.
QUESTION 17
Who of the following is an independent contractor?
Answer- a. lawyer hired on a one-time basis to represent OIT in a legal action.
An independent contractor is a person or entity providing goods or services to the other entity under the terms agreed verbally or in written agreement. Unlike employees the independent contractors act as and when required and does not contribute their services regularly. A lawyer is hired by OIT as an independent contractor to act on behalf of OIT when the need has risen. Professor and students of OIT can be considered as employees of OIT. A US Postal driver delivering mailing to OIT just does his regular and routine work and is not contracted in any written or verbal agreement.
QUESTION 18
A principal is liable for his agent’s ________________ under the doctrine of res pondeat superior.
Answer –c. torts committed within the scope of his authority
Under the doctrine of res pondeat superior, the principal is liable to the civil wrong or wrongful acts (tort) of the agent within the scope of employment or agency.
QUESTION 19
Under the doctrine of employment at will:
Answer - c. an employee can quit or be fired at any time with or without a reason.
Under the doctrine of employment at will, the employer can terminate or discharge an employee for no reason at all -without any cause as the employer sees fit. Also, the employer can change the terms of employment unless the employees are covered by few exceptions.
QUESTION 20
In the absence of any specific agreements, each partner in a general partnership has:
Answer –a. an equal right in managing the partnership.
A partnership firm is an association of persons or entity created by an agreement. Though the partners have agreed the conduct of affairs of the firm verbally, the partnership firms have written agreements to the terms of the business. The partners have unlimited liability in the sense that the partners are liable for any loss or damage occurred. By default the partners have the right to manage and control the business eventhough there is no written agreement. In the absence of a specific agreement, the partners need to have consent of all the partners in the specific area of concern like sharing of profits or adding a new partner to the business. Otherwise, the absence of any specific agreement will also provide the right to the partner to act to the best interest of the firm. Each partner has the right to participate in the proceedings of the firm if there is no written agreement of a partnership deed.
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