When Officers Act as Agents for the Corporation and a Third

question 5

Multiple Choice

When officers act as agents for the corporation and a third party is aware of some restriction on the officer's authority, then the third party

• A) would need to require the contract to be placed under seal.
• B) needs to do nothing, since it's up to the corporation to control and regulate their officer's acts.
• C) will be bound by such restrictions.
• D) can still claim he is relying on apparent authority.
• E) can ignore the common law rules of agency.

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Definitions:

Winning

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Intrinsic Fairness

An ethical principle referring to the inherent or natural equity or justice in processes, interactions, or distributions among individuals or groups.

Rational Behavior

The assumption that individuals make decisions based on seeking the most benefit while minimizing costs, according to their preferences and information.

Economic Models

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