Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice) but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is true?

a. The firm can ratify Haskin's actions and take over the contract.

b. The firm cannot ratify the contract unless Haskins had express authority to buy land.

c. If the firm ratifies the contract, the effect is that Haskins is released from liability on it.

d. none of the above

Question

Business

Zander Chen

4 February, 13:50

Haskins is an officer of a real estate development firm. Haskins purchased a piece of property in a rural area of Arizona with the idea of building resort homes there. The firm has always had board resolutions for purchases of property (as is common practice) but there was no resolution for this property purchase. The other officers in the firm have learned of the value of the property and are concerned that the firm may not own the property. Which of the following statements is true?

a. The firm can ratify Haskin's actions and take over the contract.

b. The firm cannot ratify the contract unless Haskins had express authority to buy land.

c. If the firm ratifies the contract, the effect is that Haskins is released from liability on it.

d. none of the above

+4

Answers (1)

Know the Answer?

Linda Goodwin · Answer 1

A) The firm can ratify Haskin's actions and take over the contract.

Explanation:

Hanskin's was not explicitely allowed to buy the property in Arizona, but he did it with the intention of increasing the amount of assets that the real estate company holds.

The board of directors should simply take over the contract as long as it is profitable (it most likely is), and analyze whether to change its policies about property purchasing or not, because requiring a board resolution for each one of them can make the process slow and increase opportunity costs.