When a Principal Tells an Agent Not to Enter into a Contract

question 31

Multiple Choice

When a principal tells an agent not to enter into a contract or behave in a particular manner and the agent does so regardless, the principal will still be liable for the legal consequences of the agent's act provided that, among other things:

• A)the principal has done something which has the effect of holding the agent out as having the necessary authority.
• B)the third party has suffered detriment and damages are an inappropriate remedy.
• C)the third party knew that the agent did not have actual authority but thought on reasonable grounds that the agent had apparent authority.
• D)the principal ought to have foreseen that the agent would do the act or enter into the contract.

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Definitions:

Trustworthiness

The quality of being reliable, truthful, and credible in personal or professional contexts.

Two-Way Communication

A reciprocal process of exchanging information and understanding between two or more parties, emphasizing feedback and interaction.

Telegraph

A historical communication system that transmitted messages over long distances using coded signals.

Social Media

Digital mediums and tools that allow individuals to produce, distribute content, and engage in online social networks.