Asked by Haley Smith on Jun 24, 2024
Verified
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 fails to disclose the principal.
E) all of the responses are correct.
Warranty of Authority
An assurance provided by an agent to a third party that they have the authority to act on behalf of another person or entity in a legal or business transaction.
Breach
The violation or infringement of a law, duty, agreement, or trust.
Authority
denotes the power or right to give orders, make decisions, and enforce obedience.
- Ascertain the situations in which a principal bears liability for acts committed by their agent.
- Analyze the impact of agents acting outside their authority or without disclosure.
Verified Answer
SK
Shreyal KamatJun 25, 2024
Final Answer :
E
Explanation :
An agent may be liable on contracts of its principal in all the given scenarios: when entering contracts in breach of its authority, breaching a warranty of authority, signing in their own name without disclosing the agency, and breaching authority while failing to disclose the principal. These situations involve the agent acting outside or beyond their given authority, misleading the other party, or not properly disclosing their role, which can lead to personal liability.
Learning Objectives
- Ascertain the situations in which a principal bears liability for acts committed by their agent.
- Analyze the impact of agents acting outside their authority or without disclosure.