Asked by Tasha Christina on Jun 06, 2024
Verified
Which of the following agents would not have authority to contract with third parties on behalf of the principal?
A) A salesman who sells his employer's goods.
B) A manager who hires employees for the store owner.
C) A factory worker hired to operate a machine.
D) A buyer who regularly buys merchandise for a store.
Authority
Authority refers to the legal right or power given to an individual or organization to carry out certain actions or enforce rules and decisions.
Contract
A legally binding agreement between two or more parties that outlines obligations each party must fulfill.
Principal
The original sum of money borrowed in a loan, or the amount of money invested excluding earnings or interest.
- Comprehend the notion of authority within agency relationships, encompassing apparent, express, and implied authority.
Verified Answer
KS
Kunal SawhneyJun 10, 2024
Final Answer :
C
Explanation :
A factory worker hired to operate a machine typically does not have the authority to contract with third parties on behalf of the principal. Their role is focused on production rather than making decisions that bind the company in agreements with external entities.
Learning Objectives
- Comprehend the notion of authority within agency relationships, encompassing apparent, express, and implied authority.