The key feature defining and employer/employee relationship is a.the contract between the parties.



Multiple choice. Identify on your answer sheet the one choice for each question that best completes the statement or answers the question.

1.The key feature defining and employer/employee relationship is

a.the contract between the parties.

b.whether the employee is entitled to reasonable compensation.

c.whether the employer is entitled to the absolute loyalty of the employee.

d.the employer’s right to control the employee in the performance of the employee’s tasks.

2.In determining whether a person is an employee or an independent contractor the Internal Revenue Service will chiefly consider

a.the degree of control one party exercises over the work to be done by the other party. the person is paid (periodically or by the job or project).

c.what skill the work requires.

d.what is the length of the relationship between the parties, open ended or limited by the job or project?

3.A gratuitous agent

a.owes no duties to the principal.

b.cannot be held liable for breach of contract with the principal because there is not contract. held to a lower standard of care than applied to a compensated agent.

d.can act to benefit himself/herself as well as the principal.

4.When an agent retains the benefits or profits that belong to his/her principal action against the agent for replevin can be brought by the principal.

b.the principal may demand an accounting from the agent.

c.the principal may demand that the agent post a bond in an amount determined by the court. action against the agent for the imposition of a constructive trust may be brought by the principal.

5.An agent’s implied authority not always present in a principal/agent relationship.

b.can cause additional liability to be imposed on the agent.

c.exists by virtue of being reasonably necessary to carry out the agent’s express authority.

d.can only be disclaimed by the principal, not the agent.

6.Ratification an agent’s approval of actions taken by his/her principal.

b.must be in writing. a principal’s approval of his/her agent’s unauthorized act.

d.must be made within a reasonable time to be effective.

7.An undisclosed principal

a.has no liability. bound to any contract made by his/her agent with a third party. liable under the UCC if a reasonable person under similar circumstances would find him or her liable.

d.may be subject to punitive damages for fraud.

8.Under the principle of respondeat superior.

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