Susan Is Planning to Incorporate a New Landscaping Company,"Evergreen and Growin

question 15

Multiple Choice

Susan is planning to incorporate a new landscaping company,"Evergreen and Growin'." She has held herself out as an agent for Evergreen and has contracted to buy a truck,tools,fertilizer,and seed and also has entered into a lease on behalf of Evergreen for an office.When she fails to get the loan from the bank,she cannot start the business,so she cancels all the contracts.What are the consequences?

• A) Susan can cancel all the contracts with no personal liability if she told them she was acting as an agent and expressly warranted that she would not be responsible.
• B) Susan may be held personally liable on the contracts because she misrepresented to third parties that she had authority to make contracts on behalf of a non-existent corporation.
• C) Since the company never existed,she gave no implied warranty.
• D) Susan will be held liable for the contracts only if she ever gets the loan.

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Definitions:

Incentive Motivation

Motivation driven by the desire to gain external rewards or avoid negative outcomes.

Principal to Principal

A relationship or interaction that occurs directly between the main parties involved, without intermediaries.

Agent to Agent

Communication or interaction between autonomous entities in a network, typically in the context of software or business negotiations.

Principal to Staff

The relationship and authority dynamic between the primary leaders or executives (principals) and the employees (staff) within an organization.