In Certain Cases,a Third Party Can Hold a Principal to a Contract

question 94

Multiple Choice

In certain cases,a third party can hold a principal to a contract even though the agent acted outside the authorization given him by his or her principal and even though his or her principal elected not to ratify the contract made by the agent.The third party can enforce the contract because of:

• A)the reasonable agent theory.
• B)the agent's apparent authority.
• C)agency by express agreement.
• D)fiduciary duty.
• E)the failure of the principal to register the agency agreement.

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Definitions:

Windfall

An unexpected gain or advantage, often in the form of money or goods, that is not anticipated or earned through work.

Separate Contractual Obligation

An independent commitment within a contract, not reliant on the performance or fulfillment of other obligations within the same agreement.

Contractual Relationship

A legally binding agreement between two or more parties, creating mutual obligations enforceable by law.

Unjust Enrichment

A windfall that one party to a contract stands to make at the expense of the other.