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Arthur Authorizes the Expenditure of an Additional $100,000 for the Production

question 128

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Arthur authorizes the expenditure of an additional $100,000 for the production of a new product despite mounting concerns that it will be unprofitable.The cost of the new product has already increased far beyond the initial plans and projections.Arthur's continuing support for this project illustrates the phenomenon of ________.


Definitions:

Power of Attorney

A legal paper that provides one individual the power to represent another individual in legal or financial affairs.

Agency Agreement

A contract where one party (the agent) agrees to represent or act for another party (the principal) in business dealings with third parties.

Writing Requirement

A legal principle that certain kinds of contracts or agreements must be memorialized in a signed writing to be enforceable.

Apparent Agency

A situation where a principal appears to the public to have granted authority to an agent, even if no actual authority was granted.

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