Cameron, a Purported Agent, Signs a Contract and Promissory Note

question 75

Multiple Choice

Cameron, a purported agent, signs a contract and promissory note to purchase a building for Burnstar Constructions, a purported principal. Though Cameron is an unauthorized representative, Burnstar Constructions, the purported principal, likes the deal and accepts it. Which of the following is true of the deal ratified by Burnstar Constructions?

• A) The deal is invalid due to the fraud in the inducement rule.
• B) The deal is invalid due to the fraud in the inception rule.
• C) Burnstar Constructions is liable on the note.
• D) Cameron is liable on the note.

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Definitions:

Bailey v. Drexel Furniture Company

A 1922 United States Supreme Court decision that ruled the Child Labor Tax Law of 1919 unconstitutional, which had imposed a tax on companies using child labor.

Child Labor

The employment of children in any work that deprives them of their childhood, interferes with their ability to attend regular school, and that is mentally, physically, socially or morally dangerous and harmful.

Mandatory Retirement

A policy or practice that requires employees to retire at a certain age, regardless of their personal or professional circumstances.

Welfare Capitalism

An approach to labor relations and social welfare in which companies provide benefits like health insurance and retirement plans to their employees to prevent government intervention and unionization.