Jack Was Fired by Larry but Decided to Try to Win

question 62

Multiple Choice

Jack was fired by Larry but decided to try to win back his job as agent by getting a big new contract.He approached Sharon,a new client,and made a pitch to sell Larry's product.Sharon agreed to buy 100.Jack tells Larry.What are the legal consequences?

• A) Larry has to hire Jack again and then make the deal.
• B) Larry would have to ratify the deal to get the benefit of the contract.
• C) Larry would have to negotiate the deal with Sharon himself.
• D) Jack would forfeit his commission if Larry ratified the contract.

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Definitions:

Negative Goodwill

A situation that occurs when the purchase price of a company is less than the fair value of its net assets, often recognized as a gain in the acquirer's profit and loss account.

Identifiable Net Assets

Assets of an acquired company that can be assigned a fair value and are capable of being separated or divided from the entity for recognition during an acquisition.

Contingent Consideration

Contingent consideration refers to a payment that may be required in the future, the amount of which depends on certain events or conditions that may or may not happen.

Fair Value

The estimated price at which an asset or liability could be traded in an arm's length transaction between informed, willing parties.