Jack Was Fired by Larry but Decided to Try to Win

question 62

Multiple Choice

Jack was fired by Larry but decided to try to win back his job as agent by getting a big new contract.He approached Sharon,a new client,and made a pitch to sell Larry's product.Sharon agreed to buy 100.Jack tells Larry.What are the legal consequences?

• A) Larry has to hire Jack again and then make the deal.
• B) Larry would have to ratify the deal to get the benefit of the contract.
• C) Larry would have to negotiate the deal with Sharon himself.
• D) Jack would forfeit his commission if Larry ratified the contract.

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Definitions:

Agency Problems

Conflicts of interest between the principals (owners or shareholders) and agents (managers) of a company, often arising from differing motives or information asymmetry.

Control Problems

Issues that arise in contexts where one party (the principal) delegates tasks to another party (the agent), who may have different interests or information.

Proxy Fights

Efforts by a group of shareholders to alter company management or policies by persuading other shareholders to vote in a way that is contrary to the current management's wishes.

Agency Problem

A conflict of interest arising between parties in a transaction, typically between the principals (owners) and the agents (managers) of a company, where the agent may not act in the best interest of the principal.