In which of the following situations does the agent have no liability to third parties? a. contract entered into with express authority and a fully disclosed principal b. contract entered into with no authority but later ratified in full by the principal c. contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators d. The agent has no liability in any of the above.

Question

Business

Leslie Prince

24 February, 07:45

In which of the following situations does the agent have no liability to third parties? a. contract entered into with express authority and a fully disclosed principal b. contract entered into with no authority but later ratified in full by the principal c. contract entered into for a corporation before the corporation was formed but with full knowledge and support of the incorporators d. The agent has no liability in any of the above.

+1

Answers (1)

Know the Answer?

Alejandro Lam · Answer 1

The correct option is A, contract entered into with express authority and a full disclosed principal

Explanation:

The only instance where the agent has no liability to third parties is when the agent has performed his duties with express not necessarily written authority of the principal and the agent has ensured that full information about the contract has been shared with the principal

The fact that a principal has ratified an agent's actions does not mean he has been discharged of being liable to third parties since the principal does not have full control of the transaction.

Contracts entered into before incorporation are null and void since the company is yet in existence except that the company after incorporation indicated acceptance of those contracts and appropriately communicated to third parties