1. Which of the following is true of how agency relationships are created?

• a.)
• Once created, they are permanent.
• b.)
• They are typically categorized as durable and non-durable.
• c.)
• They can be created orally.
• d.)
• They are expensive to create.

Jonathan is a real estate agent. A builder tasks him with finding a suitable piece of land for a new condo development. Once the condos are complete, John has the exclusive right to list them.

Which type of agent relationship does this represent?

• a.)
• Employee
• b.)
• General agent coupled with an interest
• c.)
• General agent
• d.)
• Special agent coupled with an interest

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

• a.)
• A principal's duty includes submitting payments to an agent.
• b.)
• A principal's duty includes honoring an agent's best interests at all times.
• c.)
• A principal owes a duty of competitive compensation to an agent.
• d.)
• A principal owes a duty to prevent any harm from coming to an agent.

Which of the following most clearly represents alawfultermination of employment?

• a.)
• A physician signs an employment contract in which she agrees to give her employer three months' notice before quitting her job. She quits with only one month's notice because she is very unhappy.
• b.)
• A pizza restaurant fires a driver for delivering pizzas later than promised, after finding out that his lateness wasdue tohelping a woman who had just gone into labor.
• c.)
• A lifeguard quits her job in the middle of the summer even though the pool will not be able to find a replacement for her on such short notice.
• d.)
• A law firm extends a job offer to third-year law student, who verbally accepts the offer and turns down other firms. The law firm rescinds the job offer before the student starts, because it suffers a large financial hit.

Samantha signs a contract with a lawyer to help her with her divorce. The lawyer uses a courier on a regular basis to deliver court documents. The courier sends Samantha a bill for the services ordered by the lawyer after checking the terms of the contract.

Is Samantha liable for the courier's bill?

• a.)
• Yes, due to apparent authority.
• b.)
• No, Samantha is not liable.
• c.)
• Yes, due to express authority.
• d.)
• Yes, due to implied authority.

Charlotte wants to put a pool in her backyard, but she does not want to pay for a pool contractor. Instead, she hires a friend who has no experience in construction or in installing pools, but who feels confident about his ability. While the pool is being dug, her friend disrupts an electrical line and the whole neighborhood loses power, causing injury to a neighbor who later sues.

Is Charlotte liable for the tort?

• a.)
• Yes, Charlotte is vicariously liable according to the "scope of employment" standard.
• b.)
• Yes, Charlotte is directly liable.
• c.)
• Yes, Charlotte is vicariously liable according to the "zone of risk" test.
• d.)
• No, Charlotte is not liable for her friend's mistake.

Hillary is a real estate agent working with a buyer to find a new home in town. She is authorized to assist the buyer in identifying a suitable home to purchase and negotiating a contract. Hillary finds a house that the buyer loves, so she quickly decides to sign a purchase and sale contract to prevent anyone else from doing so first.

Is Hillary personally liable for the contract when the buyer refuses to pay the price agreed upon by Hillary and the seller?

• a.)
• No, because it would be unreasonable to hold Hillary accountable for the cost of a home.
• b.)
• Yes, because agents are almost always liable for contracts they sign on behalf of principals.
• c.)
• No, because the seller was aware that Hillary was an agent.
• d.)
• Yes, because Hillary exceeded her authority as an agent when she signed the contract.