Jenna has been employed as Rashid's personal assistant for five years. Her job description is vague, but she helps him with many aspects of his day to day life. Jenna knows he likes art, so every year she attends a local art auction and purchases a painting on Rashid's behalf. This year, she buys a painting that is twice as expensive as usual.

Is Rashid responsible for the full price of the painting?

• Yes, due to implied authority.
• No, Rashid is not liable.
• Yes, due to apparent authority.
• Yes, due to express authority.

Karen (principal) hires John (agent) to be her financial planner. John recommends that Karen purchase a life insurance policy because he honestly believes that her family will benefit from it. He recommends a policy from UNeed Insurance because he will receive an undisclosed commission from the company if Karen purchases it.

Is John in breach of his duty to Karen?

• Yes, because he is failing in his duty to give information.
• No, because he is performing his duty to obey.
• No, because he is fulfilling his fiduciary duty.
• Yes, because he is "self-dealing."

Wilhelm discovers that a tech company has just received a patent for a new type of headphone that reduces the potential for hearing damage at high volume. The existence of this new technology is not yet widely known. However, once Wilhelm learns about it, he tells several of his friends, and they all buy stock in the tech company.

Does Wilhelm's conduct violate trade secret law?

• Yes, because Wilhelm will potentially profit from his discovery.
• Yes, because Wilhelm misappropriated the tech company's trust by telling his friends about the new technology.
• No, because the invention of this technology is publicly available information through the issuance of the patent.
• No, because the company is not yet deriving value from the technology.

Nancy, a sixteen-year-old entrepreneur, appoints her friend Josh, who is twenty, to be her agent. She asks Josh to sign a contract with a supplier for several cases of frosting for her cupcake business. Josh contacts the supplier and notifies him of his agency for Nancy. After assuring the supplier that both he and Nancy are adults, Josh signs a contract promising to pay $200. After the first shipment of frosting goes out, Nancy loses interest in the business and disavows the contract.

Is Josh personally liable for the $200?

• Yes, because Josh was acting in a personal capacity.
• Yes, because Josh warranted to the seller that Nancy was of legal age to form a binding contract.
• No, because an agent is almost never liable for contracts signed on behalf of a principal.
• No, because Nancy is a minor and lacks capacity, and therefore may disavow a contract without liability.

Russ owns a construction company and manages 10 employees. He has an extensive employee manual that clearly lays out the company's policies and expectations for its workers. The manual expressly forbids drinking alcohol during the work day. Nevertheless, one of his roofers drinks a few beers at work and ends up injuring a passerby when he throws some tools down from the roof. The injured party sues.

Is Russ liable for the tort?

• Yes, Russ is directly liable because he was the person who hired the roofer in the first place.
• No, Russ is not liable for the roofer's actions in this case because the employee manual forbade drinking on the job.
• Yes, Russ is vicariously liable according to the "zone of risk" test because the roofer was at the worksite performing his job, and his actions were foreseeable.
• No, Russ would only be liable if the injured party were another employee.