Alannis Is an Agent but Not an Employee of Tesky's

question 70

Multiple Choice

Alannis is an agent but not an employee of Tesky's Inc, a large department store business. She acts as an agent for the corporation in entering contracts with suppliers to buy clothes. While she is on a trip to Toronto to visit a long- time supplier, Tesky's goes bankrupt. The next day, Alannis, while still unaware of the bankruptcy, enters into a contract with the supplier on behalf of Tesky's to buy $20 000 worth of clothes. Which of the following are TRUE?

• A) The contract is enforceable against Tesky's because Alannis was not aware of the bankruptcy.
• B) The contact is enforceable by the supplier because the supplier could rely on Alannis having apparent authority to contract on behalf of Tesky's based on its past experience in dealing with her.
• C) The contract is enforceable against Tesky's because the supplier had no notice of the bankruptcy at the time of contracting.
• D) The contract is enforceable against Alannis, since she could not have contracted as the agent of Tesky's after the bankruptcy.
• E) The contract is not enforceable against Tesky's because Tesky's bankruptcy terminates the agency relationship.

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Definitions:

Aggregate Plan

A plan that translates annual business and marketing plans into a production plan to ensure inventory and resources are available to meet customer demand.

Inputs

Resources such as raw materials, labor, and capital that are used in the production process to create outputs.

Enterprise

A business or company, especially when considered in terms of its size, complexity, or organizational structure.

Downstream Partners

Companies or entities that perform activities in the later stages of the supply chain, closer to the end consumers, such as distributors and retailers.