Early Last Year, Lane Was Employed by Prairie Dawn Grains

Multiple Choice

Early last year, Lane was employed by Prairie Dawn Grains (PDG) , an Alberta company that produces genetically modified grains.He was sent to Saskatchewan to pursue the possibility of signing up a new customer.It was not easy, but after several weeks of difficult negotiations, he persuaded SaskFarm, a large agricultural company based in Moose Jaw, to purchase millions of dollars' worth of genetically-modified grains over several years.Upon returning to Edmonton, however, Lane discovered that PDG had entered into bankruptcy the day before SaskFarm signed the contract.Which of the following statements is most likely to be TRUE?

A) The contract is unenforceable because PDG lacked capacity when SaskFarm signed the agreement.
B) The contract is enforceable because Lane acted with actual authority.
C) The contract is unenforceable because Lane was PDG's employee and therefore could not be PDG's agent.
D) The contract is unenforceable unless PDG ratifies it.
E) The contract is enforceable as long as neither Lane nor SaskFarm knew of PDG's bankruptcy when the contract was signed.