Mischa Had a Consulting Business Which He Carried on as a Sole

question 47

Multiple Choice

Mischa had a consulting business which he carried on as a sole proprietorship. He was negotiating a contract to provide advice to Vengo Inc, a corporation carrying on business as a venture capitalist. Mischa has been dealing with Prashant, an old friend. Prashant is the office manager and Mischa knows that Prashant does not have authority to contract with him. But Vengo is aware that Prashant has been talking with Mischa, so Mischa thinks that if he gets Prashant to sign a contract, it will be binding on Vengo. Is he right?

• A) No. It is not within the usual authority of a office manager to hire consultants.
• B) Yes. It is within the usual authority of a office manager to hire consultants.
• C) Yes. By acquiescing in Prashant negotiating with Mischa, Vengo has represented that Prashant has authority to bind Vengo.
• D) No. The fact that Mischa knows that Prashant does not have authority means that he cannot rely on Prashant having apparent authority.
• E) No. The fact that Prashant does not have actual authority means that a contract signed by him on behalf of Vengo will not be binding.

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Previous Four Weeks

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