John Agent Entered into a Contract with Joe Third Party

question 7

Multiple Choice

John Agent entered into a contract with Joe Third Party to buy 50 stoves,payment to be made two weeks after John Agent picked up the stoves from Joe Third Party's warehouse.The stoves were picked up,but eight weeks later Joe still had not been paid.Joe found out that John Agent had been authorized to buy 50 stoves for Susan Principal.For some reason,John had not made it clear to Joe that he was acting as an agent,nor had he indicated that he was buying the goods for himself.Under the circumstances,which of the following is true?

• A) Third Party can successfully sue only Principal.
• B) Third Party can successfully sue only Agent.
• C) Third Party can successfully sue both Principal and Agent.
• D) Third Party can elect to recover from either Principal or Agent but not both.
• E) Third Party can ratify the contract with Principal.

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Definitions:

Arbitration

A method of dispute resolution where an impartial third party, known as an arbitrator, makes a decision to resolve a disagreement between parties.

Multi-step Procedure

A complex process involving several stages or actions to achieve a particular end.

Decision-making Power

Decision-making power is the authority to make decisions within an organization, often held by managers, leaders, or governing bodies.

Quick Resolutions

The rapid settlement or conclusion of a dispute, issue, or problem, aiming for efficiency and minimal disruption.