MULTIPLE CHOICE

1. From which of the following does a third party typically derive an agents apparent authority?

a.	the conduct of the principal
b.	reasonable inference of usual authority
c.	an expression of the limitations of authority
d.	inferring typical authority

2. Which of the following is a duty owed by a principal in an agency relationship?

a.	reimburse the agent for out-of-pocket expenses
b.	fiduciary duty to uphold the trust placed by the agent
c.	retroactively acknowledge authority of agents
d.	ratify all contracts within prescribed time limits

3. The application of which of the following is most likely to be created by the liability arising from agency principles with respect to employees and independent contractors?

a.	the doctrine of vicarious liability
b.	the common law principle of agency
c.	the common law neighbour principle
d.	the doctrine of primary liability

4. Why are corporations seen as being capable of remedying many of the shortcomings found in the sole proprietorship and partnership business forms?

a.	because corporations are easily formed business entities
b.	because none of a corporations assets are at risk
c.	because some of the owners assets in a corporation are at risk
d.	because of a corporations existence as a separate legal entity