A Principal Is Not Liable on Any Contract Made by the Agent

question 47

True/False

A principal is not liable on any contract made by the agent acting outside the scope of his or her authority.

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Definitions:

Veils Are Pierced

A legal metaphor used when courts look beyond the protection usually afforded by the corporate entity structure to hold individuals (e.g., directors, shareholders) personally liable for corporate debts or actions.

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, thus holding a portion of the corporation's ownership and often entitled to a share of the corporation's profits and voting rights.

Domination

The exercise of control or influence over someone or something, or the state of being dominant.

Pseudo-Foreign Corporation

A business entity that operates in a country different from its country of incorporation but is treated as a domestic company for legal or tax purposes.