A Principal Will Not Be Liable to a Third Party

question 61

Multiple Choice

A principal will not be liable to a third party for a tort committed by an agent:

• A)unless the principal was legally nonexistent.
• B)unless the tort was committed within the scope of the agency relationship.
• C)if the agency agreement limits the principal's liability for the agent's tort.
• D)if the tort is also regarded as a criminal act.

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Definitions:

Non-Local Check

A bank check drawn on any bank that is not local to the area where it is being presented for payment.

Depositary Bank

A financial institution that holds assets or securities for safekeeping on behalf of depositors.

Federal Reserve Bank

A part of the Federal Reserve System, which is the central banking system of the United States, responsible for implementing the country's monetary policy.

Recurring Charge

A recurring charge is a periodic fee charged automatically to an account for ongoing services or subscriptions.