An Agent Negotiates a Contract with a Third Party for Which

question 8

Multiple Choice

An agent negotiates a contract with a third party for which the agent did not have express authority.Which of the following is true?

• A) The principal can never be held liable on the contract, because the agent exceeded his authority.
• B) The principal can be liable on the contract, but only if the agent had implied authority to enter into the contract.
• C) The principal can be liable on the contract, but only if apparent authority was present.
• D) The principal may not ratify the contract.
• E) The principal may ratify the contract, or the principal may be held responsible if the existence of either implied or apparent authority can be established.

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Definitions:

Corrective Action

Measures taken to rectify, fix, or improve a situation or process following the identification of a problem or mistake.

Output Standards

Measure performance results in terms of quantity, quality, cost or time.

Performance Results

The outcomes or outputs stemming from the activities or tasks performed by an individual or organization, often measured against set goals or standards.

Accomplished Work

The completed tasks or projects that have been successfully carried out.