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:

Hydrogen Bond

A feeble connection formed between two molecules through the electrostatic force that attracts a proton in one molecule to an electronegative atom in the other.

Covalently Bonded

Refers to atoms connected by the sharing of pairs of electrons, creating a stable arrangement of atomic components.

Attraction

The force or influence that draws objects or individuals together.

Covalent Bond

A chemical bond formed by the sharing of one or more pairs of electrons between atoms in a molecule, contributing to the molecule's stability.