Q&A Hero

Q: An employer who hires an independent contractor to engage in blasting operations is not liable for any harm caused to third parties by the blasting.

Q: Liability insurance is a means by which employers spread the cost of risk of an employee's wrongful acts over the entire business enterprise.

Q: A principal is liable for any harm caused by his or her agent's tortious act.

Q: An undisclosed principal is liable to a third party for contracts made by the agent acting outside the scope of his or her authority.

Q: Any party who uses an e-agent is bound by the e-agent's actions.

Q: An undisclosed principal is one whose existence is known, but whose specific identity is not known, by a third party with whom a contract is made.

Q: 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.

Q: If an agent acts within the scope of his or her authority, a partially disclosed principal is liable to a third party for contracts made by the agent.

Q: If an agent acts within the scope of his or her authority, a disclosed principal is liable to a third party for contracts made by the agent.

Q: A principal's liability in a contract with a third party may arise from the authority given to the agent to enter into the contract.

Q: A principal can ratify a contract signed by his or her purported agent either expressly or by implication.

Q: If a principal does not ratify an authorized contract, the principal is not bound.

Q: An agent's implied authority may be conferred by custom.

Q: A power of attorney can be given only to an actual attorney.

Q: A power of attorney may be created orally.

Q: The equal dignity rule does not apply to a corporate officer who, in an ordinary business situation, acts on behalf of his or her firm.

Q: An agent's authority to act on behalf of a principal derives exclusively from the agent's implied authority.

Q: An agent's authority must be express for the agent's act to bind a principal.

Q: If a contract must be in writing under the Statute of Frauds, the agent's authority to perform the same duty must be in writing.

Q: Aurora Power Company is subject to mandatory workers' compensation laws in the states in which it does business. Beth and Doug work for Aurora as part of crew that travels to remote locations to repair downed power lines and other damaged equipment. At a distant site, Beth is injured in an accident that is entirely Doug's fault. Beth files a claim for workers' compensation. Should the claim be granted? What would be Aurora's best defense against it?

Q: Carol, a waitress at Diners Coffee Shop, notices that the kitchen staff is not wearing protective gloves while preparing food, a violation of state law. Carol reports this to her manager, but no steps are taken. Carol then tells Ethel, who works for Free Press, a local newspaper. Free Press runs a story on the violations. Business at Diners drops 65 percent. Can Diners fire Carol for these actions?

Q: Silicon Software, Inc., recruits employees in India and other Asian countries. The Immigration Act of 1990 a. encourages Silicon to hire illegal immigrants. b. encourages skilled workers to enter the United States. c. requires Silicon to hire illegal immigrants. d. requires skilled workers to enter the United States.

Q: Alpha Oil Company wants to test its workers for acquired immune deficiency syndrome (AIDS). Alpha may a. discharge employees who have AIDS. b. discriminate against job applicants who have AIDS. c. test its employees for AIDS. d. none of the above.

Q: A+ Accounting Corporation, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Omega from subjecting its employees to a. AIDS tests. b. electronic monitoring of business communications. c. genetic tests. d. lie-detector tests.

Q: First National Bank may subject its employees to lie-detector tests when investigating a. health and medical conditions. b. losses attributable to theft. c. prior work history. d. suspected drug use.

Q: Holly takes temporary leave from her job at Interstate Assembly Company to care for her new baby. When she attempts to return to work, Interstate refuses to reinstate her. Under the Family and Medical Leave Act, Holly may be entitled to a. damages only. b. damages or job reinstatement only. c. double damages, job reinstatement, a promotion, and more. d. nothing.

Q: Machine Manufacturing, Inc., employs four hundred workers at three locations in three states. Excluded from protection under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 are workers who a. are fired for gross misconduct. b. are laid off for budgetary reasons. c. have their hours decreased from full-time to part-time. d. voluntarily quit their jobs.

Q: Paul works as an employee for Eagle Distributors, Inc. The Federal Unemployment Tax Act created a. a fund to pay the costs associated with Paul's injury on the job. b. a retirement fund for Paul when he reaches age sixty-five. c. a system that provides unemployment compensation to Paul, if he qualifies. d. none of the above.

Q: Over a forty-year period, Ellen worked in a variety of jobs. She was also occasionally unemployed, briefly hospitalized, and suffered a temporary disability. She retired last year. The key federal law on all of these subjects is a. the Consolidated Omnibus Budget Reconciliation Act. b. the Employee Retirement Income Security Act. c. the Federal Insurance Contributions Act. d. the Social Security Act.

Q: Ken works for Local Excavation Corporation (LEC). While operating a backhoe, Ken suffers an injury. Ken will be compensated under state workers' compensation laws only if a. Ken does not have health insurance. b. Ken is completely disabled. c. Ken's injury was accidental and occurred on the job or in the course of employment. d. Ken successfully sues LEC.

Q: Tri-State Distribution Corporation has a staff of ten, which will increase to fifty if it obtains a certain contract. Employers are required to keep occupational injury and illness records for each employee if the employers have a. eleven or more employees. b. twenty-one or more employees. c. thirty-one or more employees. d. fifty-one or more employees.

Q: During a union election campaign at General Construction Corporation, the employer can, without monitoring or regulating by the National Labor Relations Board, threaten employees with a. a layoff only. b. a layoff or a reduction in benefits and wages. c. a reduction in benefits and wages only. d. neither a layoff nor a reduction in benefits and wages.

Q: Chip Makers Union would like Digital Products, Inc., to require union membership of its job applicants as a condition to obtaining employment. This is a. illegal in all states. b. illegal only in states that have right-to-work laws. c. legal in all states. d. legal only in states that have right-to-work laws.

Q: Computer Assembly Company (CAC) agrees with its employees' union not to buy any nonunion-produced component parts from other firms for use in CAC products. This is a. a permissible secondary boycott. b. a prohibited secondary boycott. c. a technically legal secondary boycott. d. a unilateral one-party boycott.

Q: Alpha Telecommunications Corporation employs seven thousand workers in three states. A third of the employees are member of the National Telecommunications Workers Union. Under the Labor-Management Relations Act, the union can a. demand that Alpha be a closed shop. b. insist that Alpha hire more employees than necessary. c. refuse to bargain with Alpha. d. none of the above.

Q: Industrial Solvents, Inc., and its employees are subject to federal labor law, which is concerned with the rights of a. neither the employees nor the employer. b. the employees and the employer. c. the employees only. d. the employer only.

Q: Kyle works as a forklift operator for Local Warehouse Company. Assuming that Kyle meets other requirements, the maximum number of hours that he can work per week without overtime pay is a. thirty-nine. b. forty. c. forty-one. d. unlimited.

Q: Lyle and Mary are employees of Northwest Enterprises, Inc (NEI). When Owen, the president of NEI, learns that Lyle and Mary are active in union activities, he discharges them. The employees may bring an action against NEI under a. the Fair Labor Standards Act. b. the Labor-Management Relations Act. c. the National Labor Relations Act. d. none of the above.

Q: Adam, Beth, Carol, and Dan are employees of different-sized employers in different industries. A minimum wage must be paid to employees in a. all industries. b. covered industries only. c. no industries. d. small-business industries only.

Q: Nina works as an employee for Overland Sales, Inc. To protect Nina and other employees from arbitrary discharge, courts have created exceptions to the employment-at-will doctrine based on a. an implied contract theory only. b. a public policy theory only. c. implied contract and public policy theories. d. neither implied contract nor public policy theories.

Q: Standard Corporation's employment manual states that workers will be dismissed only for good cause. Tom, an employee, is dismissed because his supervisor does not like his hat. If Tom sues the firm, a court could hold a. only that there is an implied contract on the terms in the manual. b. only that the supervisor was within his or her rights to discharge Tom. c. that there is an implied contract on the terms in the manual or that the supervisor was within his or her rights to discharge Tom. d. none of the above.

Q: An employer may hire an illegal immigrant if the employer files a special form.

Q: An employer can require an employee to take a lie-detector test when investigating losses attributable to theft.

Q: Under federal law, employers can monitor employees' personal communications without the employees' consent.

Q: Under federal law, only key employees who take temporary family or medical leave are entitled to job reinstatement.

Q: Employee contributions to pension plans vest immediately.

Q: All unemployed workers are eligible for unemployment compensation.

Q: Recovery under state workers' compensation law for an on-the-job injury is not possible if the injury was caused by the employer's negligence.

Q: In most states, employers who show an ability to pay claims do not need to buy workers' compensation insurance.

Q: Only the federal government sets safety standards governing workplaces.

Q: Employers can agree with unions not to handle, use, or deal in non-union-produced goods.

Q: A union shop is a firm that requires union membership as a condition of employment.

Q: A closed shop is a firm that rejects union membership as a condition of employment.

Q: Contracts limiting employees' rights to join unions are unlawful.

Q: Employees have the right to engage in collective bargaining through elected representatives.

Q: Federal labor law protects employees' right to strike.

Q: Children over fourteen years of age can work in hazardous occupations.

Q: Whistleblower statutes protect employees who disclose their employers' wrongdoing.

Q: Firing a worker who refuses to perform an illegal act violates public policy.

Q: There are no exceptions to the employment-at-will doctrine.

Q: A few states have held that all employment contracts contain an implied covenant of good faith.

Q: Ben hires Cathy to sell Ben's land. Before the land is sold, Cathy discovers that there is a rich vein of gold in a hill on the property. Can Cathy consider the agency terminated?

Q: Brenda is a purchasing agent for Commodity Sales Corporation. Dennis, a Commodity Sales corporate officer, gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary. The next day, Dennis calls Brenda and tells her to buy only fifty notebook computers and nothing else. Brenda shows the written authority to Eagle E-Products, Inc., and enters into a contract with Eagle to buy sixty notebook computers and a selection of printers, scanners, and extra storage media. Eagle ships the order to Commodity Sales. Is Commodity Sales liable to Eagle under the contract? Is Brenda liable? In each case, if so, why? If not, why not?

Q: Ida hires Jim, a real estate broker, to act as her agent to sell her land for $10,000. Oil is discovered beneath the land, causing its market value to increase one hundred-fold. The agency agreement is likely a. still in force if Ida gives Jim additional consideration. b. still in force if Jim does not mention the oil to prospective customers. c. terminated by mutual consent of the parties. d. terminated by operation of law.

Q: Stan hires Tina, a real estate broker, to act as his agent to sell his house. The house burns down before being sold. The agency agreement is likely a. still in force if Stan gives Tina additional consideration. b. still in force if Tina does not mention the fire to prospective customers. c. terminated by mutual consent of the parties. d. terminated by operation of law.

Q: Gil is a purchasing agent for H&H Ranch with the authority to buy cattle at a certain auction. After the cattle have been bought, the agency relationship terminates a. automatically. b. following notice to all actual cattle sellers. c. following notice to all potential cattle sellers. d. following published notice in a local newspaper.

Q: Common Carrier Corporation (CCC) employs Don as an agent. Without CCC's knowledge but otherwise acting within the scope of employment, Don commits a crime. The state can successfully prosecute a. CCC only. b. CCC or Don. c. Don only. d. neither CCC nor Don.

Q: Commercial Development Corporation (CDC) hires Delta Construction Company to work at a site as an independent contractor. Whether CDC will be liable for torts committed at the site by Delta depends on a. what Delta bid for the job. b. whether exceptionally hazardous activities are involved. c. which party obtained insurance to cover tort liability. d. who is paying Delta.

Q: Fact Pattern 32-2 Owen is an employee of Personnel, Inc. (PI). PI's only business is to supply workers to Quality Construction Company, which reimburses PI's payroll expenses. On the job, Quality controls the employees and supervises the work. Quality contracts with Regional Trucking Corporation to build a garage. Owen is injured on the job. Refer to Fact Pattern 32-2. Under the reasoning of the court in Case 3, Galvao v. G.R. Robert Construction Co., one factor for determining liability for Owen's injury would be the economic benefit derived by a. Owen, in being paid wages to work at the job site. b. PI, in having its payroll expenses reimbursed. c. Quality, in using PI's employees on the project. d. Regional, in having its contract with Quality performed.

Q: Fact Pattern 32-2 Owen is an employee of Personnel, Inc. (PI). PI's only business is to supply workers to Quality Construction Company, which reimburses PI's payroll expenses. On the job, Quality controls the employees and supervises the work. Quality contracts with Regional Trucking Corporation to build a garage. Owen is injured on the job. Refer to Fact Pattern 32-2. According to the ruling in Case 32.3, Galvao v. G.R. Robert Construction Co., liability for the injury lies with a. Owen, because there are too many parties to sort out the liability. b. PI, because Owen is PI's employee. c. Quality, because it controlled the work and supervised the job site. d. Regional, because it owns the job site and will own the garage.

Q: AAA Auto Sales, Inc., employs BBB Collection Company as a collection agent. While repossessing goods from Cathy, one of AAA's customers, BBB causes an accident in which Cathy is injured. Cathy can recover from a. AAA only. b. AAA or BBB. c. BBB only. d. Cathy's insurance company only.

Q: Elle is an agent for Fresh Food Corporation. Elle makes an innocent misrepresentation when entering into a contract on behalf of Fresh with Gala Grocery Stores, Inc. Gala a. is estopped from performing the contract. b. may rescind the contract. c. must perform the contract. d. must ratify the contract.

Q: Karen orders Tad, her real estate agent, to tell prospective buyers that there is a sparkling water spring beneath her land, even though she knows there is no spring. Tad tells prospective purchasers Larry and Helga about the spring. Helga buys the property. Karen is liable for any damages arising from her misrepresentation to a. Tad. b. Larry. c. Helga. d. none of the above.

Q: Tad, an agent for United Financial Corporation, executes an unauthorized contract with Variety Sales, Inc., that is highly advantageous to United. Variety withdraws from the deal before United ratifies the contract. The contract is a. valid. b. void. c. voidable. d. none of the above.

Q: BizOnline.com uses an electronic agent, or e-agent, to perform certain tasks in e-commerce. With respect to the e-agent's actions, BizOnline.com is bound by a. all of the actions. b. only those actions of which BizOnline.com is aware. c. only those actions that BizOnline.com does not refute within ten days. d. only those actions that BizOnine.com ratifies.

Q: Aron, an agent for Bright Sales, Inc. (BSI), enters into an unauthorized contract with Consolidated Corporation (CC) purportedly on behalf of BSI, which refuses to perform. Aron is liable to a. BSI and CC for breach of contract. b. BSI for misrepresentation. c. CC for misrepresentation. d. no one.

Q: Fact Pattern 32-1 Adam indicates that he is acting as an agent on behalf of an unidentified client when he enters into a contract with Beth.Refer to Fact Pattern 32-1. Liability to Beth for nonperformance of the contract may be imposed on a. Adam only. b. the unidentified client only. c. Adam and the unidentified client. d. none of the above.

Q: Fact Pattern 32-1 Adam indicates that he is acting as an agent on behalf of an unidentified client when he enters into a contract with Beth.Refer to Fact Pattern 32-1. The unidentified client is a. a disclosed principal. b. a non-existent principal. c. an undisclosed principal. d. a partially disclosed principal.

Q: Elin, an agent for First Credit Corporation (FC), enters into an unauthorized contract with Great Expectations, Inc. (GE), purportedly on FC's behalf. This contract will be enforceable if it is ratified by a. any third party. b. Elin. c. FC. d. GE.

Q: Phil is an agent for Quality Products Corporation. Whether it is reasonable for Reserve Supply Company to believe that Phil has authority to enter a particular contract on Quality's behalf, when Phil does not actually have that authority, is a question of a. apparent authority. b. general authority. c. power of authority. d. special authority.