An Agent May Be Liable on Contracts of Its Principal

question 1

Multiple Choice

An agent may be liable on contracts of its principal

• A)where it has entered those contracts in breach of its authority.
• B)where it has breached a warranty of authority.
• C)where the agent signs in his own name without disclosing the agency to the other contracting party.
• D)Where it breaches authority and they fail to disclose the principal.
• E)All of the responses are correct.

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Definitions:

Outstanding Cheques

Checks that have been written and recorded in the issuer's financial statements but have not yet been cashed or cleared by the bank.

Outstanding Deposits

Funds that have been deposited but not yet credited to the depositor's account, often due to processing time.

Trading Costs

Expenses incurred in the process of buying or selling securities, including commissions, spreads, and slippage.

Marketable Securities

Financial instruments that can be quickly converted into cash at market value, such as stocks, bonds, and Treasury bills.