Asked by Jennifer Zuniga on Jul 02, 2024
Newsome Enterprises Ltd. hired Joe as its purchasing agent. Joe was given the authority to purchase up to $20,000 of inventory. He discovered inventory at 50% off the normal cost so purchased $15,000. Is Newsome Enterprises Ltd. bound by Joe's agreement?
A) No, it is not bound, and Joe is liable as it exceeded his authority.
B) It can be bound if it ratifies the contract.
C) Yes, it is bound.
D) None of the responses are correct
Inventory Authority
The granted power or right to oversee and manage the list of items or properties, often within a business context for stock management purposes.
Ratifies
Formally confirms or approves an agreement or treaty, making it officially valid.
Bound
Obligated by law or duty to do something; being in a state of obligation.
- Pinpoint the scenarios where a principal is held responsible for the deeds of an agent.
- Outline the multiple approaches by which an agency connection may be formed.
Learning Objectives
- Pinpoint the scenarios where a principal is held responsible for the deeds of an agent.
- Outline the multiple approaches by which an agency connection may be formed.
Related questions
An Agent May Be Liable on Contracts of Its Principal ...
What Type of Relationship Has Formed When the Parties Have ...
Generally, the Liability of a Principal on a Contract Formed ...
Agency Relationships Come About by Voluntary Consent and Agreement of ...
Which of the Following Is True Regarding the Rights of ...