Duties of Agents: A Comprehensive Guide for Law Students

Question 1

The agent's legal obligation to act in the best interests of the principal is referred to as:

Accepted Answer

Fiduciary duty

Answer

Agency duty

Answer

Principal duty

Answer

Agent duty of care

Question 2

Which action by an agent could constitute a breach of fiduciary duty?

Accepted Answer

Any of the above

Answer

Making a secret profit

Answer

Disobeying the principal's instructions without justification

Answer

Failing to disclose a conflict of interest

Question 3

Apparent authority arises when a principal:

Accepted Answer

Allows an agent to act as if they have authority, even if they do not

Answer

Expressly grants authority to an agent

Answer

Impliedly grants authority to an agent

Answer

Appoints an agent in writing

Question 4

If an agent breaches their warranty of authority, their liability is:

Accepted Answer

Personal (they are solely liable)

Answer

Joint and several (they share liability with the principal)

Answer

Limited to the amount of the principal's loss

Answer

Only if the agent intended to deceive

Question 5

Which of the following is **not** a duty of an agent?

Accepted Answer

Prioritize the agent's personal interests

Answer

Act in the best interests of the principal

Answer

Follow the principal's instructions

Answer

Provide regular updates to the principal

Question 6

The scope of an agent's duty to maintain confidentiality:

Accepted Answer

Extends to all information acquired during the agency relationship, regardless of its sensitivity.

Answer

Applies only to trade secrets and highly sensitive financial data.

Answer

Can be waived by the principal at any time.

Answer

Terminates automatically once the agency relationship ends.

Question 7

Which of the following is NOT a recognized method for terminating an agency relationship?

Accepted Answer

Appointment of a new agent by the principal.

Answer

Completion of the purpose for which the agency was established.

Answer

Mutual agreement between the principal and agent.

Answer

Death of either the principal or agent.

Question 8

In the event of an agent's breach of duty, the customary measure of damages awarded to the principal is:

Accepted Answer

The amount of the principal's actual financial loss resulting from the breach.

Answer

The amount of profit the agent made as a result of the breach.

Answer

A fixed amount of damages regardless of the actual loss suffered.

Answer

Punitive damages intended to punish the agent for their wrongdoing.

Question 9

In which situation is an agent fulfilling their duty of disclosure?

Accepted Answer

Informing the principal about a higher offer on a property

Answer

Concealing information about property damage from a buyer

Answer

Protecting the principal's identity from a third party

Answer

Sharing personal financial information with the principal

Question 10

Which of the following is considered a core duty of an agent?

Accepted Answer

To act in a manner that is consistent with the principal's best interests.

Answer

To guarantee the financial success of the principal's ventures.

Answer

To maintain open communication with third parties on behalf of the principal.

Answer

To ensure that the principal's reputation remains intact.

Question 11

Which of the following is NOT a form of actual authority granted to an agent?

Accepted Answer

Apparent authority

Answer

Express authority

Answer

Implied authority

Answer

Ratified authority

Question 12

What is the primary obligation of an agent under the duty of loyalty?

Accepted Answer

Act in the best interests of the principal

Answer

Prioritize their own interests over the principal's interests

Question 13

An agent's duty to disclose all material information to their principal is known as:

Accepted Answer

Duty of disclosure

Answer

Duty of loyalty

Answer

Duty of care

Answer

Duty of accounting

Question 14

Which of the following is NOT a duty owed by an agent to their principal?

Accepted Answer

Duty to make a profit

Answer

Duty to obey instructions

Answer

Duty to use due care

Answer

Duty to act in good faith

Question 15

Which of the following statements accurately describes the duty of an agent to act in the best interests of their principal?

Accepted Answer

The agent has a fiduciary obligation to act in a manner that benefits the principal.

Answer

The agent must always prioritize their own interests over those of their principal.

Answer

The agent's duty to act in the best interests of their principal is limited to financial matters.

Answer

The agent's duty to act in the best interests of their principal is only triggered when the principal is present.

Question 16

Which of the following is NOT a duty of an agent under the law of the United States?

Accepted Answer

Duty to obey all reasonable instructions from the principal

Answer

Duty of care

Answer

Duty of loyalty

Answer

Duty of confidentiality

Question 17

An agent's duty to obey the principal's instructions:

Accepted Answer

Requires the agent to follow all lawful instructions

Answer

Can be ignored if the agent believes the instructions are unwise

Answer

Is limited to instructions given in writing

Answer

Is absolute, even if the instructions are illegal or unethical

Question 18

Which of the following is NOT a method for an agent to maintain open communication with the principal?

Accepted Answer

Withholding information or updates on the agency relationship

Answer

Answering inquiries promptly

Answer

Disclosing conflicts of interest

Answer

Providing regular reports and updates

Question 19

When an agent exceeds the scope of their authority:

Accepted Answer

The principal may ratify the unauthorized act

Answer

The principal has no recourse against the agent

Answer

The agent is automatically liable for any resulting damages

Answer

The agency relationship is automatically terminated

Question 20

What is a direct legal consequence of an agent breaching their duty of care?

Accepted Answer

Damages

Answer

Injunction

Answer

Rescission

Question 21

Which of the following factors is NOT relevant in determining the scope of an agent's authority?

Accepted Answer

The agent's personal beliefs

Answer

The agent's prior conduct

Answer

The principal's instructions

Answer

Custom and usage in the industry

Question 22

An agent's duty to act in the best interests of the principal arises from the:

Accepted Answer

Fiduciary relationship between agent and principal

Answer

Statutory requirements governing agency relationships

Answer

Contractual agreement between agent and principal

Answer

Implied duty of good faith and fair dealing

Question 23

Which of the following is a consequence of an agent's failure to fulfill their duties?

Accepted Answer

Breach of fiduciary duty

Answer

Automatic termination of the agency relationship

Answer

Increased profits for the agent

Answer

No legal repercussions

Question 24

An agent's duty of care obligates them to:

Accepted Answer

Act with reasonable care and diligence in fulfilling their responsibilities

Answer

Act in accordance with industry standards

Answer

Follow the principal's specific instructions

Answer

Invest the principal's money wisely

Question 25

The duty of confidentiality requires agents to:

Accepted Answer

Maintain the principal's secrets and information confidential

Answer

Disclose confidential information to the public

Answer

Share confidential information with other agents involved in the transaction

Question 26

An agent's duty to account requires them to:

Accepted Answer

Provide the principal with a complete and accurate accounting of all transactions and funds

Answer

Keep the principal's financial records confidential

Answer

Pay the principal all profits earned by the agency

Question 27

An agent has a primary duty to:

Accepted Answer

Act in the best interests of the principal

Answer

Disobey the principal's instructions

Answer

Keep the principal's secrets

Answer

Compete with the principal

Question 28

A consequence of an agent violating their duty to disclose material facts may include:

Accepted Answer

The principal having the right to rescind the contract

Answer

The contract being automatically void

Answer

The principal having no recourse

Answer

The agent being entitled to compensation

Question 29

An agent's duty to obey instructions includes:

Accepted Answer

Following the principal's lawful and reasonable directions

Answer

Ignoring instructions they disagree with

Answer

Executing any order given by the principal

Question 30

An agent's duty of accounting requires them to:

Accepted Answer

Provide periodic financial reports to the principal

Answer

Transfer all profits to the principal immediately

Answer

Maintain all financial records privately

Answer

Keep all funds in their personal account

Question 31

Which of the following circumstances does NOT terminate an agency relationship?

Accepted Answer

The agent's marriage

Answer

The death of either the principal or agent

Answer

The completion of the purpose of the agency

Answer

The agent's resignation

Question 32

An agent's duty of care and diligence requires them to:

Accepted Answer

Act with the skill, care, and prudence of a reasonably prudent person under similar circumstances

Answer

Follow the principal's instructions without question

Answer

Guarantee the success of the agency

Question 33

Which of the following is NOT a fundamental duty of an agent?

Accepted Answer

To act in their own best interests

Answer

To maintain open communication

Answer

To adhere to instructions

Answer

To act in the best interests of their principal

Question 34

An agent is required to follow their principal's instructions:

Accepted Answer

Only if they are lawful, ethical, and within the scope of the agency

Answer

Only if they are in writing

Answer

Never, as agents have the authority to act independently

Answer

Always, even if they are unreasonable or harmful

Question 35

To fulfill their duty of loyalty, an agent must keep their principal's property and funds:

Accepted Answer

Separate from their own and account for them regularly

Answer

Commingled with their own funds

Answer

With them at all times

Answer

Invested in their own business

Question 36

Which of the following is a fundamental duty of an agent acting as a fiduciary?

Accepted Answer

To prioritize the interests of their principal above their own

Answer

To maximize profits for the principal

Answer

To follow instructions from the principal, even if unethical

Question 37

How can an agent's authority be terminated?

Accepted Answer

All of the following

Answer

Act of the principal

Answer

Completion of the agency agreement

Question 38

Which of the following accurately describes an agent's duty to their principal?

Accepted Answer

To exercise reasonable care and skill in their actions

Answer

To guarantee the success of their endeavors

Answer

To work all hours necessary

Answer

To maintain a social relationship with the principal

Question 39

Which of the following is NOT considered a primary duty of agents?

Accepted Answer

To act in their own interests

Answer

To adhere to instructions

Answer

To act in the best interests of their principals

Question 40

Which duty obligates agents to keep their principals informed and provide relevant updates?

Accepted Answer

Duty of communication

Answer

Duty of loyalty

Answer

Duty of care

Answer

Duty of obedience

Question 41

An agent's duty to obey instructions is limited by which of the following?

Accepted Answer

Instructions that are illegal or unethical

Answer

None of the above

Answer

Instructions that conflict with the agent's personal beliefs

Question 42

Which of the following is a key element of an agent's duty of disclosure?

Accepted Answer

Providing all material information to the principal

Answer

Reporting only information that the principal specifically requests

Answer

Keeping the principal informed of personal matters

Question 43

Which of the following is a breach of an agent's duty of loyalty?

Accepted Answer

Acting for multiple principals with conflicting interests without proper disclosure

Answer

Making a mistake in judgment

Answer

Failing to negotiate the best possible deal for the principal

Question 44

What does an agent's right to reimbursement encompass?

Accepted Answer

Expenses reasonably incurred while performing their duties.

Answer

Payment for time spent socializing with the principal.

Answer

Compensation for any losses suffered by the principal.

Question 45

How can an agent's authority to act on behalf of their principal be established?

Accepted Answer

Expressly granted, implied, or apparent authority.

Answer

Only implied authority.

Answer

Only apparent authority.

Answer

Only expressly granted authority.

Question 46

Which scenario does NOT typically result in the termination of an agency relationship?

Accepted Answer

The death of the agent's spouse.

Answer

The occurrence of a specified event outlined in the agreement.

Answer

Mutual agreement between the parties.

Answer

The death of the principal.

Question 47

What are the consequences for an agent who exceeds their authority?

Accepted Answer

Personal liability for any resulting damages.

Answer

No liability if they disclose their lack of authority.

Answer

No liability if they acted in good faith.

Answer

Liability only if the principal ratifies their actions.

Question 48

What does an agent's duty of loyalty require them to do?

Accepted Answer

Prioritize the principal's interests above their own.

Answer

Maintain confidentiality of the principal's information.

Answer

Exercise reasonable care and skill in performing their duties.

Question 49

How does a real estate agent representing a seller breach their duty of disclosure?

Accepted Answer

By failing to inform the seller of a potential buyer's higher offer.

Answer

By negotiating a lower price for the seller than initially agreed upon.

Answer

By providing legal advice to the seller on the transaction.

Question 50

What does an agent's duty of obedience require them to do?

Accepted Answer

Follow the principal's lawful instructions.

Answer

Prioritize their own interests over the principal's.

Answer

Make independent decisions based on their own judgment.

Answer

Negotiate for the best possible outcome, even if it deviates from the principal's instructions.

Question 51

Which outcome is NOT necessarily a consequence of an agent breaching their fiduciary duties?

Accepted Answer

Automatic termination of the agency agreement.

Answer

Liability for damages caused to the principal.

Answer

Possible criminal charges depending on the nature of the breach.

Answer

Loss of commission or compensation.

Question 52

What does an agent's duty of care require them to do?

Accepted Answer

Exercise reasonable skill and diligence in performing their duties.

Answer

Act in the best interests of the principal.

Answer

Maintain confidentiality of the principal's information.

Question 53

What does an agent's duty of accounting require them to do?

Accepted Answer

Maintain accurate records of all transactions made on behalf of the principal.

Answer

Negotiate for the best possible outcome for the principal.

Answer

Provide legal advice to the principal.

Question 54

A real estate agent who secretly purchases a property listed by their agency violates which fiduciary duty?

Accepted Answer

Duty of Loyalty

Answer

Duty of Disclosure

Answer

Duty of Care

Answer

Duty of Obedience

Question 55

An agent who fails to disclose a known defect in a property they are selling, despite not being explicitly asked, potentially violates which duty?

Accepted Answer

Duty of Disclosure

Answer

Duty of Care

Answer

Duty of Loyalty

Answer

Duty of Obedience

Question 56

An agent who agrees to sell a property for $500,000 but negotiates a price of $450,000 without the principal's consent, violates which duty?

Accepted Answer

Duty of Obedience

Answer

Duty of Loyalty

Answer

Duty of Disclosure

Answer

Duty of Care

Question 57

An agent who fails to update their principal on the progress of a negotiation, despite being obligated to do so, violates which duty?

Accepted Answer

Duty of Communication

Answer

Duty of Obedience

Answer

Duty of Loyalty

Answer

Duty of Care