For Many Years, Street Sounds Inc, a Music Retailer, Purchased

question 48

Multiple Choice

For many years, Street Sounds Inc, a music retailer, purchased its supply of CDs from Smithee Entertainment Ltd, a major music producer.And for all of those years, Smithee Entertainment entered into those supply contracts by using Alan as its agent.Alan would meet with the manager of Street Sounds, that manager would request a selection of CDs, immediately pay for the order, and Alan would arrange for Smithee Entertainment to deliver the goods to Street Sounds within one week.In March 2010, as he had done countless times before, Street Sounds' manager met with Alan, selected a number of CDs, paid for the order by giving $15 000 to Alan, and was told that a shipment from Smithee Entertainment would arrive within a week.What Street Sounds did not know, unfortunately, was that Smithee Entertainment had fired Alan several days earlier.Because it has not yet received any money from Alan, Smithee Entertainment refuses to deliver any CDs to Street Sounds.Which of the following statements is most likely to be TRUE?

• A)Because it had already fired Alan, Smithee Entertainment cannot possibly be held liable for the contract in question unless it ratifies that agreement.
• B)While it may enjoy other options, Street Sounds is certainly entitled to enforce the contract against Alan.
• C)Smithee Entertainment may avoid all liability to Street Sounds by simply refusing to ratify the contract in question.
• D)Smithee Entertainment may be held liable for breach of warranty of authority.
• E)Street Sounds may be able to enforce the contract against Smithee on the basis that Alan had apparent authority to contract even though his authority was terminated because no such notice was given to Street Sounds of the termination of authority.

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Definitions:

Locus of Evaluation

Refers to where an individual's standards for judgment are located, whether internally (self-determined values) or externally (societal or others' expectations).

Catharsis

A psychological release through which an individual expresses or relieves emotional tension, often leading to a state of renewal and restoration.

Gestalt Therapy

A form of psychotherapy that emphasizes personal responsibility and focuses on the individual's experience in the present moment.

Person-Centered Therapy

A form of psychotherapy developed by Carl Rogers that emphasizes providing a supportive environment where clients can lead their own process of self-discovery and personal growth.