Business Law (BLAW 235) Final

__T__  1.   Administrative agencies create administrative law.

__F__  2.   Enabling legislation is passed by an administrative agency before it begins any regulatory activities.

__T__  3.   A federal administrative agency may exercise only those powers that Congress delegates to it.

__F__  4.   The executive, judicial, and legislative branches of government do not exercise any control over administrative agency powers and functions.

__F__  5.   The major function of an administrative agency is the enforcement of its administrative rules.

__F__  6.   A federal administrative agency's final rule is published in the United States Code.

__F__  7.   Final administrative rules do not have binding legal effect.

__T__  8.   An administrative agency can issue an "interpretive rule" through an informal method of policymaking.

__T__  9.   Administrative agencies have the power to resolve disputes through formal adjudication.

__T__ 10.   An administrative law judge makes determinations of facts.

__T__ 11.   Congress can review new federal regulations before they take effect.

__T__ 12.   Most meetings of a federal agency must be open to public observation.

__T__ 13.   An advertisement that contains an endorsement by a celebrity may be deemed deceptive if the celebrity does not actually use the product.

__F__ 14.   An ad that contains a "half truth"¾information that is true but incomplete¾is not deceptive.

__T__ 15.   It is generally illegal to send an ad via fax without the recipient's permission.

__F__ 16.   Every food product label must include a warning of the possible effects of the product on consumer health.

__T__ 17.   When a consumer cancels an order, a mail-order merchant must issue a refund within a specific period of time.

__T__ 18.   Some states have amended their consumer protection statutes to cover Internet transactions.

__T__ 19.   In a transaction subject to the Truth-in-Lending Act, all of the terms of a credit instrument must be clearly and conspicuously disclosed.

__F__ 20.   The Truth-in-Lending Act protects debtors who are natural persons, as well as those who are artificial persons, such as corporations.

__F__ 21.   A consumer may not be denied credit on the basis of a credit report.

__T__ 22.   On request, a consumer may obtain the source of any information being given out by a credit agency.

__T__ 23.   An injured party may sue a business polluter in tort.

__F__ 24.   A toxic tort is an action against a polluter that results in heavy, or "toxic," damages.

__F__ 25.   State and local government projects require environmental impact statements.

__F__ 26.   An environmental impact statement is required only for projects carried out by the federal government.

__T__ 27.   Different standards for air quality apply to sources of pollution in clean areas and sources in polluted areas.

__T__ 28.   Violators of emission standards under the Clean Air Act may be subject to civil penalties.

__T__ 29.   Those who violate the Clean Water Act may be subject to civil penalties.

__F__ 30.   Once the government begins to clean up a waste disposal site, only the site's current owner or operator must contribute to the cost.

__F__ 31.   Once the government begins to clean up a waste disposal site, only the party who generated the waste must contribute to the cost.

__T__ 32.   Flights over private land normally do not violate the property owners' rights.

__F__ 33.   A wall leaning onto a neighbor's land does not violate the property rights of the neighbor unless the wall is actually touching the neighbor's land.

__T__ 34.   If a person intends an item to be a fixture, then normally it will be considered a fixture.

__F__ 35.   A fixture is not included in a sale of land unless the contract provides for it.

__F__ 36.   Once a debtor files for bankruptcy, a secured creditor cannot recover more on a debt than the value of the collateral covering the debt.

__F__ 37.   When a discharge is denied to a debtor in a bankruptcy proceeding, the debtor’s assets are not distributed to his or her creditors.

__F__ 38.   Many small business debtors prefer to file a plan under Chapter 13 of the Code because it is less expensive and less complicated than either a Chapter 11 or Chapter 7 proceeding.

__F__ 39.   An independent contractor is one whose physical conduct is controlled, or subject to control, by his or her employer.

__F__ 40.   All employer-employee laws apply to employer–independent contractor relationships.

__T__ 41.   Employees who deal with third parties are agents of their employers.

__F__ 42.   An independent contractor may not act in the capacity of an agent.

__F__ 43.   Independent contractors are always agents of their employers.

__F__ 44.   There must be a written agreement between two parties to create an agency relationship.

__F__ 45.   A principal cannot ratify an agreement made without authorization on his or her behalf by one who is not his or her agent.

__T__ 46.   An agent who fails to use reasonable diligence and skill in acting on behalf of his or her principal may be liable for breaching a duty of performance.

__T__ 47.   A principal owes his or her agent a duty to act in good faith.

__T__ 48.   An agent must notify the principal of all material matters that come to his or her attention regarding the subject matter of the agency.

__F__ 49.   A principal is not required to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions by the agent.

__F__ 50.   A principal confers express authority on an agent only by a written instrument.

__T__ 51.   A principal’s liability in a contract with a third party may arise from the authority given to the agent to act on behalf of the principal.

__F__ 52.   A power of attorney may be created orally.

__T__ 53.   An agent’s authority must be express or implied for the agent’s act to bind a principal.

__T__ 54.   If a principal does not ratify an otherwise unauthorized contract, the principal is not bound.

__T__ 55.   A disclosed principal is liable to a third party for contracts made by the agent acting outside the scope of his or her authority.

__T__ 56.   A partially disclosed principal is liable to a third party for contracts made by the agent acting outside the scope of his or her authority.

__T__ 57.   An undisclosed principal is not liable to a third party for contracts made by the agent acting within or outside the scope of his or her authority.

__T__ 58.   A principal is not liable for an agent’s crime simply because it was committed while the agent was acting within the scope of employment.

__T__ 59.   Once the relationship between agent and principal has ended, there are some circumstances under which the principal may be bound by the agent’s act.

__T__ 60.   The Fair Labor Standards Act of 1938 regulates overtime pay.

__T__ 61.   Under the National Labor Relations Act, it is an unfair employer practice to discriminate against employees on the basis of union affiliation.

__T__ 62.   A union shop is does not require union membership as a prerequisite for employment but requires workers to join the union after a certain time on the job.

__F__ 63.   Recovery under state workers’ compensation law for an on-the-job injury is only possible if the injury was caused by the employer’s negligence.

__T__ 64.   In most states, employers who show an ability to pay claims do not need to buy workers’ compensation insurance.

__F__ 65.   A worker whose job is terminated can still participate in the employer’s health plan.

__F__ 66.   There are no exceptions to the employment-at-will doctrine.

__F__ 67.   Whistleblower statutes allow employers to discharge employees who blow the whistle on their employers.

__T__ 68.   Title VII applies to employers affecting interstate commerce with fifteen or more employees.

__F__ 69.   A victim of alleged discrimination must bring a suit against an employer before filing a claim with the Equal Employment Opportunity Commission.

__F__ 70.   Title VII does not prohibit unintentional discrimination.

__T__ 71.   Employers can be liable for Title VII violations by their managers or supervisors.

__F__ 72.   An employer is not liable for Title VII violations by lower-level employees.

__T__ 73.   Many of the same remedies available under Title VII are available under the Americans with Disabilities Act of 1990.

__T__ 74.   The Americans with Disabilities Act of 1990 provides that disabled applicants and employees are entitled to “reasonable accommodation.”

__F__ 75.   The Americans with Disabilities Act of 1990 requires that unqualified disabled applicants with disabilities be hired or retained.

__T__ 76.   A good business reason for a practice that has a discriminatory effect may permit an employer to avoid liability for discrimination.

__F__ 77.   State laws provide no more than the same remedies for the same types of employment discrimination as federal laws.

__T__ 78.   In the sole proprietorship form of business, the owner of the business receives all of the profits of the business.

__F__ 79.   The simplest form of business is the partnership.

__F__ 80.   In most states, one of the requirements for partnership status is that the firm must file a certificate of partnership with the appropriate state office.

__F__ 81.   For federal income tax purposes, a partnership is a tax-paying entity.

__F__ 82.   Agreements to form a partnership must be written.

__T__ 83.   Unless otherwise specified in the partnership agreement, profits are shared in the same ratio as capital contributions.

__T__ 84.   Partnership books and records must be accessible to all partners.

__T__ 85.   The dissolution of a partnership occurs when any partner ceases to be associated with the carrying on of partnership business.

__T__ 86.   A partnership is not dissolved by the addition of a partner.

__F__ 87.   The liability of a partner for partnership debts is limited to the amount of capital he or she invests in the partnership.

__F__ 88.   For federal jurisdictional purposes, a limited liability company is treated like a corporation.

__T__ 89.   For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.

__T__ 90.   With respect to state taxes on limited liability companies, most states do not follow the federal tax rules.

__F__ 91.   There must be an operating agreement for a limited liability company to exist.

__T__ 92.   Most limited liability company (LLC) statutes provide that unless the members agree otherwise, all profits of the LLC will be divided equally.

__T__ 93.   Most limited liability company (LLC) statutes have strict provisions regulating members’ meetings.

__T__ 94.   A limited liability partnership must be formed and operated in compliance with federal law.

__T__ 95.   A limited partnership includes at least one limited partner.

__F__ 96.   In a limited partnership, the liability of a limited partner is limited to the amount of capital he or she has invested in the partnership.

__T__ 97.   A limited partner who participates in the management of the partnership may be held liable as a general partner.

__F__ 98.   Only a limited partnership’s limited partners have a fiduciary obligation to the other partners.

__T__ 99.   When a limited partnership is dissolved, creditors are entitled to distributions of partnership assets before others are paid.

__F__ 100. In a limited liability limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership.

Multiple Choice

Identify the choice that best completes the statement or answers the question.

____ 101.   Perry, a buyer for Superior Products Company, a manufacturer of bulletin boards and other office supplies, visits a lumberyard and is shown samples of cork by Monica, a salesperson. Perry agrees to buy a certain quantity based on Monica’s statement that the shipment will match a selected sample. The statement is

a.	an express warranty.
b.	an implied warranty.
c.	a warranty of title.
d.	puffing.

____ 102.   Nick, a door-to-door salesperson tells potential customers that his products are “the best that money can buy.” This is

a.	an express warranty.
b.	an implied warranty.
c.	puffing.
d.	none of the above.

____ 103.   Ben, a salesperson for Certified Pre-owned Motors, Inc., tells Donna, “This is the best off-road vehicle ever designed.” This statement is

a.	an express warranty.
b.	an implied warranty.
c.	puffing.
d.	none of the above.

____ 104.   A-1 Tools, Inc., agrees to sell five lawn mowers to Green Landscaping Service. Their contract states that the mowers are being sold “as is.” This statement effectively disclaims

a.	the implied warranty of fitness for a particular purpose only.
b.	the implied warranty of merchantability only.
c.	the implied warranty of fitness for a particular purpose and the implied warranty of merchantability.
d.	none of the above.

____ 105.   Stan wishes to sell his sport utility vehicle (SUV). To avoid liability for any implied warranties, the sales agreement should note that the SUV is being sold

a.	“as is.”
b.	by a nonmerchant.
c.	for cash.
d.	in mint condition.

____ 106.   Best Hardware, Inc., makes and sells tools, including chain saws, for which Best issues “limited” warranties. While using a Best saw, Paula is injured. Under the Magnuson-Moss Warranty Act, an action against Best may be brought by

a.	the Federal Trade Commission only.
b.	Paula only.
c.	the Federal Trade Commission or Paula.
d.	none of the above.

____ 107.   Green Grass, Inc., sells consumer lawn care equipment under “full” warranties. According to the Magnuson-Moss Warranty Act, under a full warranty Green Grass must provide

a.	only a choice of a refund or a replacement without charge if the product cannot be repaired.
b.	only free repair or replacement of any defective part.
c.	a choice of a refund or a replacement without charge if the product cannot be repaired and free repair or replacement of any defective part.
d.	none of the above.

Fact Pattern 17-1

Earl buys a car under warranty from Fine Auto Sales, Inc., in a state that has a lemon law. General Vehicles Corporation (GVC) made the car. Its transmission does not function properly, a defect that significantly affects its use and value.

____ 108.   Refer to Fact Pattern 17-1. Under the lemon laws in most states, to resolve the problem, Earl must first

a.	complain to the arbitration program specified in GVC’s warranty.
b.	file a lawsuit.
c.	notify Fine or GVC of the problem.
d.	none of the above.

____ 109.   Refer to Fact Pattern 17-1. If Earl submits his complaint to an arbitration program, any decision by the arbitrator is binding on

a.	Earl only.
b.	GVC only.
c.	Earl and GVC.
d.	none of the above.

____ 110.   American Products, Inc. (API), manufactures construction equipment. Bob is injured while using an API nail driver and sues the company for product liability based on misrepresentation. To win, Bob must show that

a.	he was in privity of contract with API.
b.	API did not use due care with respect to the nail driver.
c.	API misrepresented a material fact regarding the tool, on which Bob relied.
d.	none of the above.

____ 111.   Medic Equip, Inc., manufactures medical devices. Tom is injured while using a Medic pacemaker and sues Medic for product liability based on strict liability. To win, Tom must show that

a.	he was in privity of contract with Medic.
b.	Medic did not use due care with respect to the pacemaker.
c.	Medic misrepresented a material fact regarding the pacemaker, on which Tom relied.
d.	none of the above.

____ 112.   Pool & Spa, Inc., manufactures aboveground swimming pools, which it sells to Home Fun Stores. Home Fun sells the pools to consumers, including Ed, who lets his friend Jenny use his pool. Jenny is injured while using the pool. In a product liability suit based on strict liability, Jenny may recover from

a.	Ed only.
b.	Ed or Home Fun only.
c.	Home Fun or Pool & Spa only.
d.	Pool & Spa only.

____ 113.   Cold Products, Inc., manufactures snowboards, which it sells to Sporting Goods Outlet. Sporting Goods Outlet sells Cold boards to consumers, including Mike. Mike is injured while using the board. In a product liability suit based on strict liability, Mike may recover from

a.	no one.
b.	Cold Products or Sporting Goods.
c.	Cold Products only.
d.	Sporting Goods only.

____ 114.   Eagle Equipment Company manufactures a backhoe, which it sells to U-All Rentals. U-All leases the backhoe to consumers, including Doug. Doug is injured by while using the backhoe, which U-All has not properly maintained. In a product liability suit based on negligence, Doug may recover from

a.	no one.
b.	Eagle or U-All.
c.	Eagle only.
d.	U-All only.

____ 115.   Dandy Goods, Inc., manufactures exercise equipment, including stationary bicycles. Julie, a consumer, buys a Dandy bicycle and years later sells it at a garage sale to Paula, a neighbor. Paula is injured while using the bicycle. In a product liability suit based on strict liability, Paula may recover from

a.	Dandy only.
b.	Dandy or Julie.
c.	Julie only.
d.	no one.

____ 116.   Van buys a car and takes it out for a ride on the expressway. The airbag suddenly inflates, blocking Van’s view of the road and causing him to crash into Ted, who is changing a tire on the side of the road. Ted may recover from the manufacturer of Van’s car only if

a.	he and Van knew each other prior to the accident.
b.	Van drove the same kind of car as Ted.
c.	he can show that Van did not inflate the airbag as a “joke.”
d.	he can show that he was injured due to a defect in Van’s car.

____ 117.   American Pharmaceuticals, Inc., Generic Drugs Corporation, and Medical Pharmacology Company are drug manufacturers. International Medicine, Inc., and Western Distributors Corporation are drug distributors. In a suit against all of the parties in which market-share liability is imposed, most likely to be liable are

a.	the distributors only.
b.	the manufacturers only.
c.	the distributors and the manufacturers.
d.	none of the above.

____ 118.   Green Country, Inc., makes landscaping and lawn care tools. Under the Restatement (Third) of Torts: Products Liability, Green could be liable for a warning defect if there is a foreseeable risk of harm posed by a product and

a.	the omission of a warning renders the product not reasonably safe.
b.	there is a reasonable alternative design.
c.	there is a lack of care in making of the product.
d.	none of the above.

____ 119.   A train’s brakes malfunction and it rolls towards maintenance workers on the tracks. Everyone gets out of the way except Dick, who wants to show off. Dick is hit by the train and sues the brake’s manufacturer. The manufacturer can raise the defense of

a.	assumption of risk.
b.	commonly known danger.
c.	product misuse.
d.	none of the above.

____ 120.   Fine Tools Corporation manufactures hammers and other tools. Abby is injured while using a Fine hammer. She sues the company for product liability based on negligence. To defend successfully against the suit, Fine Tools may show that

a.	Abby’s injury resulted from a commonly known danger.
b.	Abby misused the hammer in a foreseeable way.
c.	Fine Tools did not sell the hammer to Abby.
d.	the hammer was not altered after Fine Tools sold it.

____ 121.   Dan owes Sally $10,000. With a writ of attachment or execution, Sally can satisfy the debt from Dan’s

a.	exempt property only.
b.	nonexempt property only.
c.	exempt or nonexempt property.
d.	none of the above.

____ 122.   Larry borrows money from Joan. If Larry defaults, to use a writ of execution as a remedy Joan must first

a.	commence a suit against Larry.
b.	succeed in a suit against Larry.
c.	be unable to collect the amount of a judgment against Larry.
d.	all of the above.

____ 123.   Eve borrows $1,000 from Friendly Credit Company. Eve defaults on the debt. Friendly Credit obtains a garnishment order from a court. To satisfy the judgment, the order will likely be served on

a.	Eve.
b.	Eve’s employer.
c.	Friendly Credit.
d.	the sheriff or other public officer.

____ 124.   First National Bank holds a mortgage on Gail’s property. Gail defaults on the debt. The bank forecloses. If the proceeds of the foreclosure sale are insufficient to pay the costs of the sale and the debt, the bank can

a.	obtain a deficiency judgment against Gail.
b.	reclaim the property as a voidable transfer.
c.	use the equity of redemption to redeem the property.
d.	none of the above.

Fact Pattern 21-1

Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Carl, president and owner of Beta, asks First National Bank to loan Beta the funds.

____ 125.   Refer to Fact Pattern 21-1. If First National insists that Carl sign the loan application, making himself personally liable for payment whether or not Beta defaults, Carl will be

a.	a guarantor only.
b.	a surety only.
c.	a guarantor and a surety.
d.	none of the above.

____ 126.   Refer to Fact Pattern 21-1. If First National insists that Carl sign the loan application, making himself personally liable for payment only if Beta defaults, Carl will be

a.	a guarantor only.
b.	a surety only.
c.	a guarantor and a surety.
d.	none of the above.

Fact Pattern 21-2

Adam’s home is in a state that has a $15,000 homestead exemption. Adam defaults on a $30,000 debt that he owes to Beth. Adam’s home is sold at auction for $40,000.

____ 127.   Refer to Fact Pattern 21-2. Adam will receive

a.	$15,000.
b.	$25,000.
c.	$30,000.
d.	nothing.

____ 128.   Refer to Fact Pattern 21-2. Other property that Adam may own that may be exempt from satisfaction of judgment debts includes

a.	investments that Adam has made in his relatives’ businesses.
b.	recreational vehicles that Adam uses on weekends.
c.	tools that Adam uses in his trade.
d.	none of the above.

____ 129.   Jean goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when

a.	a court grants a petition in bankruptcy that automatically stays all litigation by creditors against a debtor.
b.	a debtor is unable to pay his or her debts as they come due.
c.	a debtor’s creditors force the debtor into bankruptcy proceedings.
d.	a debtor’s debts exceed the fair market value of his or her assets.

____ 130.   Evan files for bankruptcy on Monday. He owes money to Fred, who has a valid security interest in Evan’s bicycle. Fred, who is uneasy about Evan’s ability to pay, but who does not know about the bankruptcy, tries to repossess the bicycle on Tuesday. Fred

a.	can repossess the bicycle and file suit for payment of the debt.
b.	can repossess the bicycle, but cannot file suit for payment of the debt.
c.	cannot repossess the bicycle, but can file suit for payment of the debt.
d.	cannot repossess the bicycle nor file suit for payment of the debt.

____ 131.   Don files a petition for bankruptcy. Don’s creditors must file with the court their proof of claims against Don’s assets within

a.	fifteen days of the creditors’ meeting.
b.	thirty days of the creditors’ meeting.
c.	sixty days of the creditors’ meeting.
d.	ninety days of the creditors’ meeting.

Fact Pattern 21-3

Dan sells his sports car to his brother for $100. The next week, Dan files for bankruptcy under Chapter 7.

____ 132.   Refer to Fact Pattern 21-3. Dan’s brother dies while driving the sports car. Dan is his brother’s sole heir. The inheritance is

a.	part of the bankruptcy estate if the brother dies before Dan files for bankruptcy.
b.	part of the bankruptcy estate if the brother dies within 180 days after Dan files for bankruptcy.
c.	part of the bankruptcy estate because the sale of the car was made in “bad faith.”
d.	exempt property.

____ 133.   Mark is a trustee for a federal bankruptcy court. Mark’s duties include

a.	collecting a debtor’s property.
b.	establishing an order of priority for the payment of unsecured creditors.
c.	submitting to an examination under oath by the creditors.
d.	all of the above.

Fact Pattern 21-4

In January, Jazz Dance Studio owes Kay, its musical director, $1,800 for current wages, receives $700 as a down payment for dance lessons from Lora, and pays a Music, Inc., a sheet music supplier, $1,500 of $3,000 owed. In February, the studio files for bankruptcy under Chapter 7.

____ 134.   Refer to Fact Pattern 21-4. Based on the size of the studio’s estate in bankruptcy, each of Jazz’s creditors will get only 10 percent of their claims. Regarding the payment to Music, Inc., the trustee may

a.	not recover it because Music’s claim has priority.
b.	not recover it unless Music is an insider.
c.	recover it as a fraudulent transfer.
d.	recover it as a voidable preference.

____ 135.   Larry files a bankruptcy petition under Chapter 7 to have his debts discharged. The debts most likely to be discharged include claims for

a.	alimony and child support.
b.	back taxes accruing within three years before bankruptcy.
c.	certain fines and penalties payable to the government.
d.	student loans, the payment of which would impose undue hardship on Larry and his dependents.

____ 136.   Refer to Fact Pattern 21-4. Which of the claimants have priority?

a.	Kay
b.	Lora
c.	Music, Inc.
d.	Kay and Music, Inc.

____ 137.   Some creditors commence actions to collect on overdue debts against Mary. Other creditors already hold judgments against Mary on other overdue debts but have not yet collected on them. Mary obtains a discharge in bankruptcy. The discharge

a.	only stops uncompleted actions to collect overdue debts.
b.	only voids uncollected judgments on overdue debts.
c.	stops actions and voids judgments regarding overdue debts.
d.	none of the above.

____ 138.   Jill believes that she should file a plan for a Chapter 13 discharge in bankruptcy. A Chapter 13 bankruptcy plan must provide for

a.	the completion of all payments to all creditors within six years.
b.	the payment of 100 percent of all obligations in full.
c.	the surrender of all collateral to the creditors.
d.	the turnover of the debtor’s future income to the trustee.

____ 139.   A petition for a discharge in bankruptcy under Chapter 13 may be filed by

a.	Ben, the sole proprietor of Midtown Net Services.
b.	Interstate Online Service Providers, a partnership.
c.	National Webserver, Inc., a corporation.
d.	all of the above.

____ 140.   Nick files a voluntary petition for bankruptcy under Chapter 13. The value of the property to be distributed under the plan is more than the amount of the creditors’ claims. The court will refuse to approve the plan on the objection of

a.	a creditor only.
b.	the trustee only.
c.	a creditor or the trustee.
d.	none of the above.

____ 141.   Martin, the owner of Ace Transport, a trucking firm, files a voluntary petition for bankruptcy under Chapter 13. If Martin is granted a discharge, all of his included debts will be discharged except claims

a.	for alimony and support.
b.	for fraudulently incurred debts.
c.	resulting from malicious or willful injury.
d.	all of the above.

____ 142.   Nora is an executive for Omega Corporation. When acting for Omega in an ordinary business situation, Nora is

a.	an agent only.
b.	a principal only.
c.	an agent and a principal.
d.	none of the above.

____ 143.   American Products, Inc., employs Bill as a salesperson, with the authority to sell American’s products at prices that Bill negotiates in the field. With respect to those prices, Bill is

a.	American’s employee only.
b.	American’s employee and agent.
c.	an independent contractor.
d.	none of the above.

Fact Pattern 22-1

Janet and Julie work at ABC Interiors. Janet is a designer who works with clients of ABC on interior design projects. ABC closely supervises all of its designers, and dictates their work schedules. Julie works part-time in the evenings cleaning the offices.

____ 144.   Refer to Fact Pattern 22-1. Janet is ABC’s

a.	employee but not agent.
b.	employee and agent.
c.	independent contractor.
d.	employee, agent, and independent contractor.

____ 145.   Mike is an architect who works for General Construction Company. The most important factor in determining whether Mike is General’s employee or an independent contractor is

a.	the degree of control that General exercises over Mike.
b.	the distinction between General’s business and Mike’s occupation.
c.	the length of the working relationship between General and Mike.
d.	the method of payment.

____ 146.   Ross is legally incompetent. Ross can be

a.	an agent only.
b.	a principal only.
c.	an agent or a principal.
d.	none of the above.

____ 147.   Associated Investments employs Owen to buy property for a future commercial development. Owen secretly buys some of the property and sells it to Associated Investments at an inflated price. Owen has breached the duty of

a.	accounting.
b.	loyalty.
c.	notification.
d.	none of the above.

____ 148.   International Software, Inc., employs Jill as an agent. During the agency, Jill acquires new knowledge and skills. She also learns International’s trade secrets, including customer lists. After the termination of the relationship, Jill uses her acquired skills and knowledge, but not International’s trade secrets, in a new job. Jill has breached the duty of

a.	loyalty.
b.	obedience.
c.	performance.
d.	none of the above.

____ 149.   National Computer Corporation (NCC) employs Cynthia as an agent. NCC gives her an exclusive territory in which to sell NCC products. NCC cannot compete with her in that territory under the duty of

a.	compensation.
b.	cooperation.
c.	indemnification.
d.	reimbursement.

____ 150.   Doug employs Executive Personnel Agency as an agent. They sign a written agreement that describes the rights and duties of both parties. This is

a.	apparent authority.
b.	express authority.
c.	implied authority.
d.	none of the above.