Risky Transactions Are Those in Which

question 127

Multiple Choice

Risky transactions are those in which:

• A) complete information is not available.
• B) there is an balance of information between buyer and seller.
• C) one party to a transaction uses the other party's lack of information to their advantage.
• D) one party withholds information from the other party and uses that to his advantage.

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Definitions:

Indemnification

The act of compensating for loss or damage, often seen in contracts where one party agrees to cover the losses of another.

Damages

Monetary compensation imposed by law for loss or harm stemming from breach of contract, negligence, or other wrongful act.

Reimbursement

The act of compensating someone for an expense or loss incurred.

Apparent Authority

Authority that is only apparent, not real. An agent’s apparent authority arises when the principal causes a third party to believe that the agent has authority, even though she or he does not.