AccountingQueen
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1. Steve is Jason's agent, and it's within Steve's authority as Jason's agent to purchase homes on Jason's
behalf. Steve contracts with Albert to buy Albert's house for Jason. Steve, however, doesn't tell Albert that
he's buying the house on Jason's behalf or that he's acting for another individual. Under the terms of the
contract, which of the following statements is true?
A. Neither Steve nor Jason can be held liable.
B. Only Steve can be held liable.
C. Both Steve and Jason can be held liable.
D. Only Jason can be held liable.
2. Molly borrowed $5,000 from Larry and, as collateral, gave him jewelry and authority to sell the jewelry
if she defaulted. Afterward, Molly had second thoughts and revoked the agency. Which of the following
statements is true?
A. Molly can't terminate the agency unless Larry sold the jewelry.
B. Molly can't terminate the agency unless she claims bankruptcy.
C. Molly can terminate the agency based on impossibility of performance.
D. Molly can terminate the agency if she paid the loan.
3. Shauna creates a website that sells shoes. Meagan chooses shoes, enters her credit card information, and
purchases the shoes. She then receive an e-mail confirming the purchase. The website is programmed to
perform these functions, and Shauna has no personal knowledge of the transaction. Shauna was on
vacation at the time of the transaction and didn't personally approve it. She returns from vacation, checks
the site, and discovers the transaction. Was a contract created?
A. No, because Shauna never confirmed the purchase.
B. Yes, because agency by necessity applies.
C. Yes, because the computer is an agent for Shauna.
D. No, because the computer isn't an agent for Shauna.
4. Carl, a little person with dwarfism, applies for a job. He is told he won't be hired because he is a little
person. Carl sues, claiming discrimination under the Civil Rights Act. Which of the following statements is
true?
A. Unless Carl can show that the height requirement has a disparate impact on short people, he has no claim.
B. Carl has a good claim.
C. Carl has no claim.
D. Unless the employer can show that being of a certain height is a bona fide job qualification, Carl has a good claim.
5. David gives Ethel power of attorney. David then has a nervous breakdown and becomes insane. Ethel
has the authority to act on David's behalf
A. only until Tom regains his sanity.
B. if the power of attorney is a durable power of attorney.
C. by necessity.
D. with regard to personal property but not real property.
6. Samantha hires Zack, a real estate agent, to sell her home. Samantha then goes sailing. While she is
gone, the pipes in her house burst. The agent discovers this, is unable to reach Samantha, and hires a
plumber to fix the pipes. The plumber sends the bill to Samantha. If Samantha has to pay, it's most likely
based on agency by
A. necessity.
B. estoppels.
C. appointment.
D. implication.
7. The right to notice of a plant closing or massive layoffs due to sale of a business is derived from the
A. Hart-Scott-Rodino Antitrust Act.
B. Antitrust Procedures and Penalties Act.
C. Worker Adjustment and Retraining Notification Act.
D. Employee Retirement Income Security Act.
8. Carter wants to impress his boss, Marco. Carter approaches one of Marco's potential clients and
negotiates a contract with the client on Marco's behalf. The client agrees and signs the contract. Marco,
however, doesn't know about Carter's negotiation. Carter lacks the authority to negotiate on Marco's
behalf. When Marco finds out, he is so pleased about the contract that he overlooks Carter's actions and
tells Carter he did an excellent job landing the client. This forms an agency by
A. estoppel.
B. agreement.
C. ratification.
D. operation of law.
9. Anna gives Doris a power of attorney. Doris does business with Big Bank as Anna's agent. Anna then
revokes the power of attorney. Anna is not liable on any contracts Doris made
A. after Big Bank received notice that she was no longer an agent.
B. after her agency was terminated.
C. after the date of termination but before notice was received by Big Bank.
D. that weren't fully performed at the time notice was received by Big Bank.
10. Cara's boss sends her nude photos of himself. She complains that it's sexual harassment. The boss says
that it's not sexual harassment because he didn't ask her for sexual favors. The boss's actions
A. constitute quid pro quo sexual harassment.
B. don't constitute sexual harassment because he didn't create a hostile work environment.
C. constitute sexual harassment because he created a hostile work environment.
D. don't constitute sexual harassment because he didn't ask for sexual favors.
11. Jane works for Big Business, Inc., as a sales representative. The boss decides to fire her because she
isn't a Mets fan. The boss can
A. not fire Jane if she agrees to become a Mets fan.
B. not fire Jane if here work was satisfactory.
C. fire Jane.
D. not fire Jane because of the Civil Rights Act of 1964.
12. Javier gives written authorization to Tamara to sell his house. Javier dies on the October 4. On October
8, Tamara enters into a written contract on behalf of Javier to sell the house to Trudy for $100,000. Before
Tamara entered into the contract, she showed the written authorization to Trudy. Javier's estate is
A. not liable.
B. obligated to sell for $100,000 because Tamara had express authority.
C. liable if Tamara knew Javier was deceased at the time of the contract.
D. liable if the price is fair.
13. Irene hires Mark to do work for her. In the course of performing that work, Mark causes injury to a
third party. Which of the following statements is true?
A. If Mark is an independent contractor, Irene is liable for the injury.
B. If Mark is an employee, Irene is liable for the injury.
C. Irene is liable for the injury whether Mark is an employee or an independent contractor.
D. Irene isn't liable for the injury whether Mark is an employee or an independent contractor.
14. Phil receives a job offer from Big Tech, Inc., in a letter that states, "If you leave your current position
and join us, we will employ you for the next five years as our company expands." Phil takes the job, and
he is fired after six months even though his work was satisfactory. If Phil sues and wins, the most likely
reason is
A. express contract.
B. promissory estoppels.
C. the employment at-will doctrine.
D. the state's right-to-work law.
15. Tony tries to start a union at Big Tech, Inc. His employer learns of his attempt to organize a union and
fires him. Big Tech's actions
A. are permitted if they first give Bob notice forbidding the union.
B. constitute an unfair labor practice.
C. are permitted.
D. are permitted if the state has adopted right-to-work legislation.
16. Bob works for the government and belongs to a union. Bob's union goes on strike. Which of the
following statements is true?
A. If the strike is lawful, Bob must be a federal employee.
End of exam
B. The strike is lawful because only government employees can strike.
C. The strike is unlawful because only nongovernment employees can strike.
D. If the strike is lawful, Bob must not be a federal employee.
17. Bob's company was found in violation of OSHA. The violation likely relates to
A. workers' compensation.
B. racial discrimination.
C. failure to pay overtime.
D. workplace safety.
18. Lee hires Zeke to sell her house. She tells Zeke to ask for $200,000, but says she will take $175,000.
Zeke's friend Victor asks Zeke about the house, and Zeke tells him that Lee will take $175,000. Victor
offers $175,000, and Zeke accepts. Zeke violated his duty of
A. due diligence.
B. loyalty.
C. obedience.
D. account.
19. Norma has worked for Big Factory for 15 years, has never missed a day of work, and has always been
an excellent worker. One day, without warning, Norma's supervisor fires her without any explanation.
Norma knows of no reason for the termination. Which of the following statements is true?
A. Norma can't do anything as long as the reasons were nondiscriminatory.
B. Norma may file a bad faith action against her supervisor.
C. Norma may file a bad faith action against Big Factory.
D. Norma can't do anything unless she lives in an employment-at-will jurisdiction.
20. Sal hires Antoinette to sell his house and gives her power of attorney that authorizes her to do, but the
power of attorney says nothing about price. Sal tells Antoinette to take nothing less than $200,000. Harry
offers Antoinette $195,000 for the house, and Antoinette accepts. If Sal is bound by the sale contract, the
most likely reason is __________ authority.
A. apparent
B. actual
C. express
D. implied