Phinneas asks a travel agent to reserve a flight and hotel for his upcoming vacation to Mexico.

Which type of agent relationship does this represent?

• a.)
• Independent contractor
• b.)
• Special agent
• c.)
• Agency coupled with an interest
• d.)
• General agent

Which of the following is true of an agent's duty to a principal?

• a.)
• An agent must preserve a principal's confidential information, but only until the end of his or her agency.
• b.)
• An agent has a duty to warn a principal of any anticipated risk of physical harm.
• c.)
• An agent must obey all directions given by a principal.
• d.)
• An agent has a fiduciary duty to a principal.

Which of the following most clearly represents anillegaltermination of employment?

• a.)
• A corporation that is downsizing fires its five most recently hired employees, two of whom are disabled.
• b.)
• A hospital CEO fires an administrator who recently filed for bankruptcy, because she's concerned that other employees will lose confidence in him.
• c.)
• An accountant quits her job on her 60th birthday because she's saved up enough money to retire.
• d.)
• A business start up chooses not to offer a new contract to an IT consultant after his old contract expires.

Pacey, an insurance agent, is told by his employer at his annual review meeting that he needs to "boost his sales of insurance policies in the next quarter by 50%." To meet this goal, Pacey decides to blackmail several people that he knows. He threatens to expose their secrets unless they purchase an insurance policy from him. Someone reports Pacey to the police and he's arrested and charged with blackmail.

Is Pacey's employer liable for his criminal act?

• a.)
• No, the employer is not liable because it did not authorize a criminal act.
• b.)
• Yes, the employer is vicariously liable for the crimeandfor any tort suits related to the crime.
• c.)
• Yes, the employer is vicariously liable according to the "zone of risk" test.
• d.)
• Yes, the employer is directly liable.

Randy, an agent for Retail Empire Inc., has been authorized to purchase parcels of land to further the company's real estate development business. Randy closes a deal with a seller on a two-acre lot in town. He signs a contract with his name and the notation "agent for Retail Empire Inc." The company later directs Randy to pull out of the deal and breach the contract.

Is Randy personally liable for the contract?

• a.)
• Yes, because agents are always liable for contracts they sign.
• b.)
• Yes, because the principal was undisclosed.
• c.)
• No, because the company directed him to breach the contract.
• d.)
• No, because it was clear thathe was signing the contract as an agent.