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A fiduciary relationship allows the parties to avoid obligations without liability.
ANSWER: F
PAGE: 638

A corporate officer is not an agent for the corporation.
ANSWER: F
PAGE: 638

An officer of a corporation cannot possess the power to bind the corporation. ANSWER: F
PAGE: 638

An agent is authorized to act on behalf of a principal in doing business with third parties.
ANSWER: T
PAGE: 638

An employee may act in the capacity of an agent.
ANSWER: T
PAGE: 638

A fiduciary relationship involves trust and confidence.
63 ANSWER: T
PAGE: 638
An independent contractor’s physical conduct is controlled, or subject to control, by his or her employer.
ANSWER: F
PAGE: 639

An agency relationship does not exist outside employer-employee relationships. ANSWER: F
PAGE: 638

Building subcontractors are not independent contractors.
ANSWER: F
PAGE: 639

Employees who deal with third parties are agents of their employers.
ANSWER: T
PAGE: 638
TYPE:

An independent contractor is an employer who controls his or her agent’s performance.
ANSWER: F
PAGE: 639

An employee may not act in the capacity of an agent.
ANSWER: F
PAGE: 638

All employment laws apply to independent contractors.
ANSWER: F
PAGE: 639

An independent contractor may act in the capacity of an agent.
ANSWER: T
PAGE: 639

Agency relationships exist only outside employment relationships.
ANSWER: F
PAGE: 639

An independent contractor always acts in the capacity of an agent.
ANSWER: F
PAGE: 639

An agency relationship can be formed without consideration.
ANSWER: T
PAGE: 642

A minor cannot be appointed as an agent.
ANSWER: F
PAGE: 642

A minor can be an agent.
ANSWER: T
PAGE: 642

An agency relationship cannot exist in the absence of a formal agreement. ANSWER: F page 642

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Chapter 31
Agency Formation and Duties
TRUE/FALSE QUESTIONS
A1. A