When an Agent Approaches a Third Party and Forms a Contract

question 49

Multiple Choice

When an agent approaches a third party and forms a contract but fails to disclose his status,

• A) the agency relationship is terminated since the agent did not represent himself properly.
• B) the third party's recourse is against the principal as he is liable for all actions of the agent.
• C) the principal is the victim of misrepresentation by the agent and the third party.
• D) the third party's recourse is only against the principal as he is liable for performance of the contract.
• E) the third party can exercise the option of either holding the principal or the agent responsible for performance on the contract.

---

Definitions:

Northern Merchants

Business individuals or entities operating in the northern part of a country, often associated with trade during historical periods such as pre-Civil War America.

Nat Turner's Rebellion

An 1831 slave revolt in Virginia led by Nat Turner, which resulted in the deaths of many individuals and had significant repercussions for African-Americans.

Southern Whites

Typically refers to white residents of the Southern United States, historically associated with specific social and cultural characteristics.

1831 Turning Point

A reference to significant historical events or developments in 1831, which could vary by context (e.g., Nat Turner's slave rebellion).