Maureen Owns a Business That Makes Kites

question 42

Multiple Choice

Maureen owns a business that makes kites.Maureen's agent Bob entered into an agreement with Alice to purchase some land for a new kite factory.Maureen's agency relationship with Bob was not memorialized by any writing.The day after Bob signs the papers finalizing the sale,Maureen learned of the purchase,was furious with Bob,and said that she wanted out of the deal.Assuming that Bob was legally considered the agent of Maureen in making the purchase,which of the following is Maureen's best argument?

• A) That the agency agreement with Bob was not in writing and that under the equal dignities rule she should not be bound.
• B) That agency agreements may not extend to the purchase of land.
• C) That under the exclusion principle, Bob was not authorized to purchase land unless expressly authorized by Maureen.
• D) That she did not need land and that therefore she should not be bound because Bob was mistaken.

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Definitions:

Macro-aging Schedule

A method used in financial analysis that categorizes accounts receivable or other financial assets based on the period of time they have been outstanding.

Current Ratio

A financial metric used to evaluate a company's ability to pay off its short-term liabilities with its short-term assets.

Current Liabilities

Short-term financial obligations that a company owes and is expected to pay within one year or within the normal operating cycle.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.