Dart CorpDismissed Ritz as Its General Sales Agent

question 43

Multiple Choice

Dart Corp.dismissed Ritz as its general sales agent.Dart notified all of Ritz's known customers by letter.Bing Corp. ,a retail outlet located outside of Ritz's previously assigned sales territory,had never dealt with Ritz.However,Bing knew of Ritz as a result of various business contacts.After his dismissal,Ritz sold Bing goods,to be delivered by Dart,and received from Bing a cash deposit for 20 percent of the purchase price.It was not unusual for an agent in Ritz's previous position to receive cash deposits.In an action by Bing against Dart on the sales contract,which of the following is true?

• A) Bing will win the lawsuit because Dart's notice was inadequate to terminate Ritz's apparent authority.
• B) Bing will win the lawsuit because Dart,the principal,is an insurer of Ritz's,the agent's acts.
• C) Bing will lose the lawsuit,because Ritz lacked any express or implied authority to make the contract.
• D) Bing will lose the lawsuit because Bing was negligent while making a contract with Ritz.

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Definitions:

Avoid The Contract

The act of declaring a contract null and void, meaning it is treated as if it never existed due to breaches or violations of terms.

Ratification

The act of accepting and giving legal force to an obligation that previously was not enforceable.

Legal Force

the effect or power of law enforced by judicial or governmental institutions to mandate compliance or punish violations.

Mentally Incompetent

A legal status indicating that an individual lacks the mental capacity to manage their own affairs or make important decisions.