When a Person Makes a Contract as an Agent for Another

question 21

Multiple Choice

When a person makes a contract as an agent for another but lacks authority to do so,the contract:

• A) binds the principal but not the agent.
• B) binds the principal and the agent.
• C) does not bind the principal.
• D) none of the above.

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Definitions:

Southwest Airlines

An American low-cost airline known for its unique business model and customer service approach.

New Markets

Market segments or geographical areas that were previously unexplored or underexploited by a business or industry.

Elastic Demand

A situation where the quantity demanded of a good or service changes significantly as its price changes.

Price Elasticity of Demand

An index showing the extent to which demand for a product changes in reaction to a variation in its price, where an elasticity exceeding one signifies a strong response.