An Agent with No Express, Implied, or Apparent Authority to Do

question 13

Multiple Choice

An agent with no express, implied, or apparent authority to do so identified himself as an agent for his principal, and on behalf of his principal bought a computer. The principal refused to ratify the contract. On these facts, which of the following is true?

• A) The principal would have to pay for the computer because the agent was an agent for that principal.
• B) The agent could be sued by the seller of the computer for breach of his warranty of authority.
• C) By exceeding his authority, the agent has become the buyer of the computer himself.
• D) The seller of the computer could sue the agent for breach of contract for saying he was an agent.
• E) The seller could sue the principal for breach of warranty of authority.

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Definitions:

Direct Labor-Hours

The cumulative hours put in by workers who are directly engaged in the production process.

Traditional Costing System

A cost accounting method that assigns overhead costs to products based on a predetermined rate, often ignoring the causal relationship between cost objects and activities.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on their usage.

Selling Price

The price at which a product or service is offered to the buyer.