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1
An agency relationship may be formed by a written or oral contract.
A)True
B)False
2
In order for an agent to bind a principal to a contract, the agent must have authority to do so.
A)True
B)False
3
If a principal does not expressly or implicitly authorize an agent to enter into a contract on his behalf, the agent will not be able to bind the principal to any such contract.
A)True
B)False
4
An agent who receives no compensation for his services is a special agent.
A)True
B)False
5
An agent owes a fiduciary duty of utmost confidence, loyalty, and trust to his principal.
A)True
B)False
6
The agency relationship is usually automatically terminated when the principal dies.
A)True
B)False
7
Which of the following statements is true regarding independent contractors?
A)Independent contractors are never considered agents.
B)Independent contractors exercise a considerable amount of discretion for themselves as to how a particular task will be completed.
C)Independent contractors generally keep regular work hours over an indefinite period of time.
D)Independent contractors have very little ability to control the physical details of their work.
8
All of the following may serve to automatically terminate an agency except:
A)completion of the object of the agency.
B)death of the agent.
C)failure of the agent to compensate the principal.
D)death of the principal.
9
When the agency relationship ends:
A)The principal should give notice to third parties that the relationship is over in order to limit liability.
B)The principal is under no duty to inform third parties because no liability will occur if the relationship is over.
C)The agent may still act on behalf of the principal if the particular situation warrants it.
D)The agent's duty not to use or disclose confidential information also ends.
10
An agent who receives no compensation for his services is a:
A)Subagent.
B)Free agent.
C)Gratuitous agent.
D)Star agent.





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