Question 1

Which of the following is true with regard to contractual relations between the principal and a third party?

Accepted Answer

A)  There is no liability on the part of the principal if the agent acts with implied authority. 
B)  An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise. 
C)  A principal cannot be bound if the agent acts without any authority. 
D)  An unidentified principal is bound only if the agent acts within the scope of actual authority. 
A)  There is no liability on the part of the principal if the agent acts with implied authority. 
B)  An undisclosed principal and the third party are contractually bound if the agent acts within her actual authority, unless the contract specifies otherwise. 
C)  A principal cannot be bound if the agent acts without any authority. 
D)  An unidentified principal is bound only if the agent acts within the scope of actual authority.

Question 2

An agent who makes a contract for a disclosed principal whose contracts are voidable for lack of contractual capacity:

Accepted Answer

A)  is never liable to the third party. 
B)  can be liable to the third party under certain circumstances. 
C)  is liable to the third party only if the agent warrants the principal has capacity. 
D)  is ordinarily personally liable to the third party if the principal avoids the contract. 
A)  is never liable to the third party. 
B)  can be liable to the third party under certain circumstances. 
C)  is liable to the third party only if the agent warrants the principal has capacity. 
D)  is ordinarily personally liable to the third party if the principal avoids the contract.

Exam 29: Relationship With Third Parties

Which of the following is true with regard to contractual relations between the principal and a third party?

An agent who makes a contract for a disclosed principal whose contracts are voidable for lack of contractual capacity:

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