Puporting to Act on Behalf of Otton Mining Inc, Gaetan

question 62

Multiple Choice

Puporting to act on behalf of Otton Mining Inc, Gaetan signed a contract to purchase some mining claims from Boucher. Boucher believes it is contracting with Otton. In fact, Gaetan had no authority from Otton to contract on its behalf. He had never discussed buying the claims with Otton, but he thought that Otton would be interested in the claims and would pay him a commission for arranging for Otton to buy them. Which of the following is TRUE?

• A) The contract is binding on Gaetan personally.
• B) The contract will be binding on Otton if Otton ratifies the contract either expressly or impliedly.
• C) The contract can never be binding on Otton since it was negotiated without any authority from Otton.
• D) The contract is binding on Gaetan personally but he can avoid liability if Otton ratifies the contract.
• E) The contract is binding on Otton and Gaetan.

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Definitions:

Horizontal Communication

The exchange of information, ideas, or messages among individuals or groups at the same level in an organization.

Pelz Effect

Subordinates feel more satisfied in their jobs the more their supervisors are able to influence higher-level decisions.

Manager's Power

The authority and influence a manager has over their direct reports, stemming from their position and the ability to affect employees' tasks and outcomes.

Newcomer Assimilation

The process by which a new member of a community, organization, or culture adopts its norms and practices.