Harbor Bay Development Hires Guthrie to Act as Its Agent

question 24

Essay

Harbor Bay Development hires Guthrie to act as its agent to buy a 100-acre waterfront tract of land from Frankie for $1,000 per acre.Harbor Bay does not want Frankie to know that it is the principal or that Guthrie is its agent.Harbor Bay wants the land for a new marina,and believes that Frankie may not sell the land for that purpose or may demand a premium price.Guthrie makes the purchase,signing only his name on the contract as the buyer and not disclosing to Frankie the agency relationship.Harbor Bay gives Guthrie the amount to pay for the land,but Guthrie absconds with the funds.Frankie soon learns of Harbor Bay's identity.Can Frankie enforce the contract against Harbor Bay? against Guthrie?

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping.

Intertemporal Price Discrimination

Practice of separating consumers with different demand functions into different groups by charging different prices at different points in time.

Coupons

Vouchers or codes that offer a discount on the purchase price of goods or services, usually issued by manufacturers or retailers to stimulate demand.

Two-part Tariff

A pricing strategy that involves a fixed charge plus a variable usage rate.