Asked by
Manoj Kumar
on Dec 20, 2024
Verified
Which of the following is true with regard to contractual relations between the principal and a third party?
A) There is no liability on the part of the principal if the agent acts with implied authority.
B) An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise.
C) A principal cannot be bound if the agent acts without any authority.
D) An unidentified principal is bound only if the agent acts within the scope of actual authority.
Undisclosed Principal
In an agency relationship, a principal whose identity is not revealed to the third party by the agent.
Implied Authority
Authority of an agent that is not expressly granted but assumed to be given as necessary to perform tasks related to their job.
Actual Authority
The explicit power granted to an agent or representative by the principal to perform certain acts on their behalf.
- Comprehend the implications of contractual liability for disclosed, partially disclosed, and undisclosed principals.
Verified Answer
AB
Learning Objectives
- Comprehend the implications of contractual liability for disclosed, partially disclosed, and undisclosed principals.