Exam Review SU#16

Question 1

Under the Federal Insurance Contributions Act (FICA) the following are considered wages

Answer 1

1. Commissions
2. Bonuses
3. Contingent Fees
4. Vacation Pay
5. Severance Allowances
6. Tips

“reimbursed travel expenses are NOT part of wages”

Question 2

If an broker enters into a contract with a seller on a corporations behalf

Answer 2

The broker will have the same actual authority as if the Corps. identity had been disclosed.

Actual Authority: is conveyed by the principal’s giving express or implied consent to the agent to bind the principal to 3rd parties. Actual authority is not affected by failure to disclose the principal

Question 3

A prerequisite for the creation of an agency relationship is

Answer 3

The principal must have capacity.

Question 4

An agency may be implied in law without intent to form the relationship.

Answer 4

A person may be held liable as a principal for the act of another person even though she did not intend to grant any authority

Question 5

A Durable Power of Attorney is effective during a period of

Answer 5

incapacity of the principal.

Question 6

A general Power of Attorney

Answer 6

authorizes the agent to do anything that may be necessary to transact the principal’s affairs

Question 7

If the principal is sued for the agents negligence

Answer 7

the principal has the right to indemnification from the agent

Question 8

Vicarious Liability

Answer 8

prevents individuals from avoiding liability for a tort by hiring an agent to perform the act

Question 9

A principal is liable for his or her conduct

Answer 9

The agent is not liable for a crime committed by the agent, but may be held criminally liable for a crime of the agent if

1. the principal approves or directs the crime
2. The principal participates or assists in the crime
3. Violation of regulatory statute constituted the crime

Question 10

Section 1 of the Sherman Act of 1890 addresses

Answer 10

vertical restraints imposed by parties that are not in direct competition at the same functional level of distribution

Question 11

Section 2 of the Sherman Act of 1890

Answer 11

applies to acts of one party

Question 12

Under the Sherman Act of 1890, some arrangements among competitors are

Answer 12

illegal per se.

Question 13

The Clayton Act prohibits

Answer 13

1. Exclusive dealing
2. Price discrimination among different buyers
3. Interlocking directorates

Question 14

The Robinson-Patman Act of 1936 amended the Clayton Act with respect to

Answer 14

price discrimination. Price discrimination involving commodities of like grade & quality is illegal if the effect is to substantially lessen competition or create a monopoly

Question 15

The fair Labor Standards Act of 1938 applies to

Answer 15

employer with at least $500,000 in sales or that is engaged in interstate commerce

Question 16

The Family & Medical Leave Act of 1993 (FMLA) entitles an eligible employee to

Answer 16

12 work weeks of leave without pay & without losing his or her job

1. the birth of a child
2. a serious health condition
3. the care of a spouse, son, daughter, or parent who has a serious health condition

Question 17

The authority of OSHA is

Answer 17

authorized to establish standards that protect employees from exposure to substances that may be harmful to their health

1. OSHA was established by congress to develop safety standards, prevent injuries, and promote job safety
2. OSHA is authorized to develop detailed health and safety standards & to enforce them through fines & other sanctions
3. The act requires employers to provide employees with a workplace free from recognized hazards & substances that are likely to cause death or serious physical harm

Question 18

An agency relationship is terminated by operation of law if

Answer 18

1. Principal’s death
2. Principal’s incapacity
3. Agents failure to acquire a necessary business license

Question 19

The Occupational Safety & Health Act

Answer 19

Prohibits an employer from discharging an employee for revealing violations of the act

Question 20

The remedies available to a principal when an agent fraudulently breaches a fiduciary duty is

Answer 20

1. Termination of the agency

2. Constructive Trust

Question 21

A employer who fails to withhold FICA taxes from covered employees wages, but who pays both the employer and employee shares will

Answer 21

Have a right to be reimbursed by the employees from employees share. An employer is primary liable to pay an employees share of FICA tax if the employer fails to pay and remit it. The employer then has the right to reimbursement of the amount paid

Question 22

Under the ADEA Age discrimination in Employment Act the following practice is prohibited

Answer 22

1. Compulsory Retirement of Employees below the Age of 70 is prohibited
2. It intended to prevent arbitrary discrimination based on age.
3. However, it allows an employer to discharge an employee for good cause

Question 23

Workers compensation acts require an employer to

Answer 23

Provide coverage for all eligible employees

Question 24

Universal Agent

Answer 24

is a person who is authorized to conduct all of the principal’s business that the principal my legally delegate

Question 25

General Agent

Answer 25

are authorized to perform a range of acts including all acts relevant to the purpose for which they are engaged

Question 26

Gratuitous Agent

Answer 26

Uncompensated agents are known as this

Question 27

Special Agent

Answer 27

are engaged for a particular transaction & are authorized to perform specific activities subject to specific instructions

Question 28

Del credera agent

Answer 28

is a surety. she guarantees the obligations of the third party to the principal. The obligation of the 3rd party to the principal. The obligation of this type of agent is based on the promise to answer for the debt of another