Jones Acted as Blake's Agent for 12 Years Before This

question 7

Multiple Choice

Jones acted as Blake's agent for 12 years before this contract of agency was dissolved by Blake. However, Blake failed to convey this fact to those vendors with whom Jones contracted in the past. Which of the following is likely to occur if Jones negotiates future contracts with these vendors on Blake's behalf?

• A)Blake can rescind those contracts since Jones is no longer an agent.
• B)Blake can sue the vendors for contracting without authorization.
• C)Blake would be bound by those contracts and would have to pay the contracted price.
• D)Blake can claim compensation from Jones for any profits made.

---

Definitions:

Certified Public Accountants

Licensed accounting professionals who have passed the CPA examination and met state certification and experience requirements, skilled in areas such as audit, tax, and financial consulting.

Enrolled Agents

Tax professionals licensed by the federal government to represent taxpayers in matters regarding the Internal Revenue Service (IRS).

Proportional Tax Rate

A tax system where the tax rate is constant regardless of the amount subject to tax.

Private Letter Rulings

Written decisions by the Internal Revenue Service (IRS) in response to taxpayers' requests for guidance on the tax implications of their specific transactions or events.