Chapter 8 - Agency Formation and Duties Flashcards
agency
-
agent
- a person who agrees to represent or act for another, called the principal
exclusive agency
- an agency in which a principal grants an agency an exclusive territory and does not allow another agent to compete in that territory
fiduciary
- as a noun, a person having a duty created by his or her undertaking to act primarily for another’s benefit in matters connects with the undertaking
- as an adjective, a relationship founded on trust and confidence
independent contractor
- one who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer
- an independent contractor is not an employee but may be an agent
principal
-
SAMPLE TEST QUESTIONS
- Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on behalf. In this relationship, Jewelry & Coin is :
a. an employee
b. an independent contractor
c. a principal
d. an agent
ANSWER :
(C)
CORRECT :
(C) a principal
SAMPLE TEST QUESTIONS
- California Produce Company hires Drew to work on California Produce’s shipping dock, checking outgoing loads and dispatching the company’s drivers. With respect to California Produce, Drew is most likely :
a. an agent
b. an independent contractor
c. a principal
d. a work for hire
ANSWER :
(B)
CORRECT :
(A) an agent
SAMPLE TEST QUESTIONS
- Elaine owns the Fabric & Yarn store. Goldie is a salesperson in the store. When Goldie makes a sale to Heather, the sale is binding on :
a. Elaine
b. Goldie
c. Fabric & Yarn only - and only if Elaine is present at the sale
d. no one
ANSWER :
(A)
CORRECT :
(A) Elaine
FACT PATTERN 8-1B
Margo works as an administrator and receptionist in Neon’s Garage Door Store. Neon withholds federal taxes from Margo’s pay, and controls the methods and details of the performance of her work. Margo is not authorized to modify the prices or other terms of a sale at the store. Omar installs Neon’s Garage Door products at the buyers’ locations.
FACT PATTERN 8-1B
- Refer to Fact Pattern 8-1B. Neon authorizes Omar to sell garage door upgrades and accessories at the buyers’ locations at prices that Omar negotiates with those buyers. With respect to sales at these locations, Omar is :
a. an independent contractor
b. Neon’s employee only
c. Neon’s employee and agent
d. Neon’s principal
ANSWER :
(C)
CORRECT :
(C) Neon’s employee and agent
FACT PATTERN 8-1B
- Refer to Fact Pattern 8-1B. At the shop, Margo is :
a. an independent contractor
b. Neon’s employee only
c. Neon’s employee and agent
d. Neon’s principal
ANSWER :
(A)
CORRECT :
(C) Neon’s employee and agent
FACT PATTERN 8-1B
- Refer to Fact Pattern 8-1B. Neon hires Professional Janitorial Company to clean the store. Neon gives Professional Janitorial instructions as to what needs to be cleaned and when. Professional Janitorial is :
a. an independent contractor
b. Neon’s employee only
c. Neon’s employee and agent
d. Neon’s principal
ANSWER :
(A)
CORRECT :
(A) an independent contractor
SAMPLE TEST QUESTIONS
- Donato is Equipment Repair Service Company’s chief executive officer. On Equipment Repair’s behalf, Donato solicits business, hires and fires workers, and handles finances. Equipment Repair pays Donato varying amounts, depending on his “needs.” Donato is most likely :
a. a principal
b. an employee
c. an employer
d. an independent contractor
ANSWER :
(B)
CORRECT :
(B) an employee
SAMPLE TEST QUESTIONS
- Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes’ behalf. Sybil is :
a. an agent
b. an employee
c. an employer
d. a principal
ANSWER :
(A)
CORRECT :
(A) an agent
