An Agent Is Not Liable for Making an Unauthorized Contract

question 49

Multiple Choice

An agent is not liable for making an unauthorized contract if:

• A)the third party does not know that the agent lacks authority.
• B)the principal fails to subsequently ratify the contract.
• C)the agent does not notify the third party that he does not warrant his authority to contract.
• D)the third party actually knows that the agent lacks authority.

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Definitions:

Chronological

Organized or occurring in order of time of occurrence, often used in timelines, histories, and narratives to show sequence.

Cause-and-effect

A relationship where one event (the cause) leads directly to another event (the effect).

Problem-solution

A method of organizing information or arguments that first identifies a problem and then proposes one or more solutions for it.

Specific-to-general

A method of organization where details start with specific instances and lead to a general conclusion or understanding.