If a Third Party Relies on the Principal's Representation That

question 126

Multiple Choice

If a third party relies on the principal's representation that the agent has the authority to act, which of the following is true?

• A) The principal can claim the agent had no authority.
• B) The agent is solely liable for the conduct if it results in injury to the third party.
• C) The principal can claim estoppel.
• D) The principal cannot claim the agent had no authority.
• E) The agent can sue the principal for breach of contract.

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Definitions:

Combined Return On Investment

A measure assessing the total financial return of different investments or the aggregate performance of an entire investment portfolio.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, contributing to covering fixed costs and generating profit.

Residual Income

The net income that exceeds the minimum required return on investment or capital; often used as a performance measure in managerial accounting.

Investment Opportunity

An option to allocate resources with the expectation of generating a return or profit in the future.