An Agent Contracted with a Third Party on Behalf of a Principal

question 29

Multiple Choice

An agent contracted with a third party on behalf of a principal, but went beyond both his actual and apparent authority. The third party was never paid. Which of the following indicates the legal position of the third party?

• A) He can successfully sue the principal because the principal is always liable for the actions of his agent.
• B) He can successfully sue the agent for breach of warranty of authority if the principal fails to ratify the contract.
• C) Since the agent had no authority, the third party has no remedy against anyone.
• D) The third party can ratify the deal and force the principal to go through with it.
• E) He can sue the agent for the tort of nuisance.

Recognize the benefits and drawbacks of vertical relationships for consumers, manufacturers, and retailers.

Understand the role of arbitrage in defeating price discrimination.

Understand the concept of price discrimination and its application to different market segments.

Identify solutions to the free-riding problem among retailers.

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Definitions:

Foreign Exchange

Foreign money needed to carry out international transactions.

Currency

A system of money in general use in a particular country, facilitating the exchange of goods and services.

Corporate Form

A legal structure for businesses characterized by limited liability for its shareholders, perpetual succession, and the potential to raise capital through the sale of stock.

Personal Liability

The legal responsibility individuals have to fulfill the obligations of debt or other legal responsibilities personally, risking personal assets.