Ratification and Agency Relationships Quiz
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Questions and Answers

What is the main reason Jenny's victory in selling the advertising deal with AutoMax was not considered a victory by her supervisor?

  • AutoMax was not interested in advertising on DotBomb's website.
  • The contract was for less than six months.
  • The advertising deal was not profitable for DotBomb.
  • DotBomb's CEO did not approve contracts exceeding six months. (correct)

    • Why did DotBomb provide Dave with a written notice of termination?

  • He had not made any sales recently. (correct)
  • He did not follow up with potential advertisers.
  • He refused to provide marketing materials to advertisers.
  • He was not making enough cold calls.

    • What method do DotBomb's salespeople use to contact potential advertisers?

  • Contacting them via social media.
  • Sending emails.
  • Visiting them in person.
  • Making cold calls. (correct)

    • Why does DotBomb sell advertising space on its website in addition to retail products?

    <p>To generate additional revenue. (A)</p> Signup and view all the answers

    In which scenario would DotBomb's CEO need to approve an advertising deal?

    <p>Deals that exceed six months. (B)</p> Signup and view all the answers

    How does DotBomb's sales team usually follow up after making cold calls to potential advertisers?

    <p>By sending marketing materials like business cards and company letterhead correspondence. (D)</p> Signup and view all the answers

    What type of business relationship exists between Hank and Biff?

    <p>A formal partnership (B)</p> Signup and view all the answers

    If Big Billy wants to collect $5000 from either Hank or Biff for Hank's Unyun® debt, who should he be able to collect from?

    <p>$5000 from Hank (A)</p> Signup and view all the answers

    With a court order to collect on Hank's $5000 Unyun® debt against his interest in the hot sauce business, what would Big Billy be entitled to?

    <p>One half of the excess assets over liabilities upon dissolution, up to $5000 (B)</p> Signup and view all the answers

    In the context of Hank and Biff's business relationship, why is it important to establish the existence of a partnership?

    <p>To clarify the rights and obligations of both parties (A)</p> Signup and view all the answers

    If Hank and Biff's partnership agreement was not in writing, what type of business relationship could be assumed?

    <p>A joint venture (D)</p> Signup and view all the answers

    What legal concept is highlighted by Hank's Unyun® debt being classified as personal rather than business-related?

    <p>Statute of Frauds (A)</p> Signup and view all the answers

    Why could (B) potentially succeed?

    <p>Ratification creates an agency relationship. (A)</p> Signup and view all the answers

    Why is (C) a potential success?

    <p>Paul's statement to Bob constitutes ratification. (B)</p> Signup and view all the answers

    Why will (A) fail?

    <p>Ratification retroactively authorizes acts. (D)</p> Signup and view all the answers

    What was the initial reaction of Barb when Alex told her about the zine?

    <p>She expressed interest and offered help. (C)</p> Signup and view all the answers

    How do Alex and Barb earn revenue from their zine?

    <p>Through sales of advertising. (D)</p> Signup and view all the answers

    What are Alex and Barb's long-term plans for the zine?

    <p>To make it their sole employment eventually. (B)</p> Signup and view all the answers

    Does the election of LLP status increase management rights?

    <p>False (C)</p> Signup and view all the answers

    Is an LLC more similar to a corporation or a limited partnership?

    <p>Neither (A)</p> Signup and view all the answers

    Does the adoption of LLP status exempt partners from contributing to satisfy partnership obligations?

    <p>False (B)</p> Signup and view all the answers

    Are partners responsible for their own torts in an LLP?

    <p>True (A)</p> Signup and view all the answers

    Can partners sign capital call agreements in an LLP?

    <p>Depends on the LLP agreement (D)</p> Signup and view all the answers

    In what aspect are member-managed LLCs and closely held corporations similar?

    <p>Management structure (A)</p> Signup and view all the answers

    Why was the contract enforceable against Dena, even though she made them on behalf of an undisclosed principal?

    <p>Dena had actual authority. (B)</p> Signup and view all the answers

    If Dena disclosed that she represented Wacky World before executing contracts with Mary and Robert, what would make the contracts enforceable?

    <p>Wacky World must have ratified them. (B)</p> Signup and view all the answers

    Why could Mary and Robert have reasonably believed that Dena had authority to enter into contracts despite her lack of actual authority?

    <p>Custom in the market allowed Dena to proceed this way. (A)</p> Signup and view all the answers

    Why did Dena lack actual authority to buy land for more than $100,000?

    <p>Dena did not have the necessary permission. (A)</p> Signup and view all the answers

    What would have made the contracts unenforceable if custom or other evidence did not suggest that Dena had the authority to enter them?

    <p>Dena's lack of authority. (D)</p> Signup and view all the answers

    If John is the owner and manager of an apartment building, what implications might this have on agency relationships based on the given text?

    <p>John's potential liability for undisclosed agent actions. (D)</p> Signup and view all the answers

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