An Agent Who Makes a Contract for a Disclosed Principal

question 82

Multiple Choice

An agent who makes a contract for a disclosed principal whose contracts are voidable for lack of contractual capacity:

• A) is never liable to the third party.
• B) can be liable to the third party under certain circumstances.
• C) is liable to the third party only if the agent warrants the principal has capacity.
• D) is ordinarily personally liable to the third party if the principal avoids the contract.

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Definitions:

Balance Sheet

An overview report capturing a business's financial condition, specifying its holdings, liabilities, and shareholder equity at a specific instant.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a period, highlighting its profitability.

Not-For-Profit Organizations

Organizations that have primary objectives such as public service rather than returning a profit to its owners.

Management Accountant

A professional role focused on providing financial data and advice to inform managerial decision-making and strategic planning.