Why Is the Agent Able to Be Held Liable on a Contract

question 67

Multiple Choice

Why is the agent able to be held liable on a contract when the existence of the agency arrangement was not disclosed?

• A) so that the outcome in a contract situation is the same as that for a tort
• B) to discourage the use of undisclosed agency arrangements
• C) to offset the fraud frequently present in this situation
• D) because the third party could rely on the reputation of only the agent when entering into the contract
• E) to ensure that the principal fulfills its obligations under contracts negotiated by authorized agents

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Definitions:

Activities Control

Management processes that oversee, regulate, and guide operational activities within an organization to ensure they align with set objectives.

Just-In-Time (JIT) Scheduling

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Materials

Physical substances or components used in the production of goods or in the execution of projects and services.

Workstation

A specific area or desk equipped with the necessary tools and technology for an individual to perform their job tasks.