Sal, an accountant, contracts with Torre to act on Torre's behalf during a tax audit. Their contract does not expressly state that Sal will be paid for the service. Most likely, Torre must pay

A) the customary compensation for the services.
B) only the expenses accrued in the course of the audit.
C) only the costs incurred if he accountant fails to perform.
D) nothing.

Question

Billy Bloks · Accepted Answer

Final Answer : A, Explanation :  Under common law principles governing agency relationships, when a person (the agent) agrees to act on behalf of another (the principal) and the agreement does not expressly mention compensation, it is generally understood that the agent will be paid the customary or usual compensation for such services. Since Sal is acting as Torre's accountant for a tax audit, it is reasonable to assume that Sal would be paid the customary fee for such professional services, even though the contract does not specify payment.

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