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.

---

Definitions:

Dollar Today

The current value of the US dollar against a basket of foreign currencies, affecting import and export prices.

Equal Cash Flow

Recurrent inflow or outflow of cash that is the same in amount for each period.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of retirement planning.

Sensitivity Analysis

A technique used in financial modeling to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.