1. You tell the salesperson at your local bicycle shop that you plan to bicycle about 4000 miles from Astoria, Oregon to Bar Harbor, Maine. The salesperson recommends a particular brand of tire, telling you, “It’s rugged and designed to last for 5,000 miles under heavy load.” You buy the tire but it falls apart 400 miles into your trip. The tire failure would be an example of a:

a. breach of the warranty of good title.

b. design defect because a bicycle tire should last more than 400 miles regardless of the conditions under which it is used.

c. breach of the implied warranty of fitness for a particular purpose.

d. breach of the implied warranty of merchantability.

2. The relationship between an employer and employee is most like the relationship between:

a. agent and third party

b. principal and agent

c. employer and independent contractor

d. principal and third party

3. Fiduciary duty implies:

a. the agent must always act in the principal’s best interest.

b. the principal must always act in the agent’s best interest.

c. a principal is liable for an independent contractor’s tort liability.

d. the principal is legally obligated when an agent acts outside the scope of his or her authority.

4. If John orally agrees to find a reliable used car for Mary and does not expect to be paid:

a. John is not an agent because he is not getting paid.

b. John is a gratuitous agent and owes Mary all fiduciary duties owed to a principal.

c. John is not an agent because the agreement was not in writing.

d. John owes no duty of diligence or due care in his work for Mary.

5. Amy was hired as the general manager of a bookstore. In October she ordered a delivery of heating oil for the store but never discussed this purchase with the store’s owner. Amy:

a. has no authority to purchase heating oil on behalf of the bookstore.

b. is personally liable to pay for the oil if the bookstore's owner refuses to pay.

c. has implied authority to purchase heating oil only if the temperature drops below 55°.

d. has implied authority to purchase the heating oil.