problem 1: When an agency relationship is ratified, which of these is not true?
a. Acceptance by the principal may be implied by the principal’s behaviour.
b. Ratification must occur within a reasonable time after creation of the contract.
c. The principal may accept only part of the agreement.
d. All of the above are true.
problem 2: The term “holding out” refers to:
a. The principal having legal capacity to enter into contracts.
b. Authority that is implied by the conduct of the principal, such as paying for the goods.
c. Authority that is implied by the usual authority given to someone in that position.
d. Conduct where the principal represents that someone has authority to act as an agent and bind him or her.
problem 3: In this legal form of business, a relationship exists between/among persons carrying on a business with a view of profit:
a. Sole proprietorship
b. General partnership
problem 4: What determines whether a business relationship constitutes a partnership?
a. The substance of the relationship, not the form.
b. The sharing of profits.
c. Factors such as contribution of property or labour, participation in management, and holding oneself out as a partner.
d. All of the above.
problem 5: Which of these is not a partnership rule implied by statute in case it is not expressly covered in the agreement?
a. A partner is entitled to be paid a salary for engaging in a partnership basis.
b. A partner is not entitled to interest on capital contributions to the partnership but is entitled to interest on loans to it.
c. Unanimous consent is required to admit a new partner.
d. All of the above are implied terms.