Daniel Negotiated a Contract on Behalf of Compu/sys Inc for the Supply

question 8

Multiple Choice

Daniel negotiated a contract on behalf of Compu/sys Inc for the supply of a computer system to Leader Co.The contract called for the supply by Compu/sys Inc of hardware and maintenance services for two years in return for $1 million.Daniel had no authority to negotiate this contract on behalf of Compu/sys.After 18 months of negotiations, Compu/sys agreed to perform the contract in part.The corporation agreed to provide the hardware but not the maintenance services.By the time it made this commitment it had gone bankrupt and consequently had lost capacity.Which of the following is TRUE?

• A)Compu/sys ratified the contract even though it did not agree to the obligations under the contract within a reasonable time.
• B)Compu/sys has ratified the contract because it has agreed to some of the obligations under the contract.
• C)Compu/sys has ratified the contract because a bankrupt corporation can ratify a contract.
• D)If Compu/sys has not ratified the contract, Daniel will not be personally liable in any circumstances.
• E)Cumpu/sys did not ratify the contract because a bankrupt principal does not have the capacity to ratify a contract.

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Definitions:

Initial Premium

The first payment made by the insured to the insurer to initiate an insurance policy coverage.

Life Insurance

A contract between an insurer and a policyholder, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.

Spouse

Spouse refers to a partner in a marriage.

Procure Policy

The process of obtaining or arranging an insurance policy.