#1
Which of the following is true regarding the fiduciary duty of loyalty in an agency relationship?
The agent must act in the best interest of the principal.
ExplanationAgent obligated to prioritize principal's interests.
#2
What does 'vicarious liability' refer to in the context of agency law?
Liability imposed on the principal for the actions of the agent.
ExplanationPrincipal held responsible for agent's actions.
#3
Which of the following is NOT a termination method for an agency relationship?
Revocation by the agent.
ExplanationAgent cannot unilaterally revoke the agency.
#4
What is the difference between actual authority and apparent authority in agency law?
Actual authority is explicitly granted by the principal, while apparent authority is implied based on the agent's actions.
ExplanationActual authority explicit; apparent authority implied from actions.
#5
In an agency relationship, what is the duty of obedience?
The agent must obey all instructions given by the principal that are lawful and within the scope of authority.
ExplanationAgent must follow lawful, authorized instructions.
#6
Under what circumstances can an agency relationship be implied?
When there is no formal agreement, but the conduct of the parties implies an agency relationship.
ExplanationImplied when conduct suggests agency.
#7
In agency law, what does the doctrine of 'respondeat superior' mean?
The principal is responsible for the actions of the agent performed within the scope of employment.
ExplanationPrincipal's responsibility for agent's actions within job scope.
#8
Under what circumstances can an agency relationship be terminated by operation of law?
When the subject matter of the agency is destroyed.
ExplanationTermination when agency subject matter destroyed.
#9
What is the doctrine of 'undisclosed principal' in agency law?
The principal who is not known to exist by the third party with whom the agent contracts.
ExplanationPrincipal unknown to third party in contract.
#10
What is the legal significance of an agent's undisclosed conflict of interest?
It renders any contracts entered into by the agent voidable at the principal's discretion.
ExplanationContracts voidable if agent's undisclosed conflict.