Agency Relationships
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In an agency relationship involving a principal, an agent and a third party, whether or not the agency relationship has been disclosed to the third party is a crucial issue. This would affect:
a. the contract liability of the principal to the third party for a tort of the agent
b. the tort liability of the agent to the third party for the agent's tort
c. the tort liablility of the principal to the third party for a tort of the agent
d. the liability of the principal to compensate the agent's services
e. the contract liability of the agent to the third party on a contract made by the agent on the principal's behalf
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Solution Summary
The solution discusses when the principal is liable to the third party in a contract.
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The correct answer is e. the contract liability of the agent to the third party on a contract made by the agent on the principals behalf.
The general rule is that the principal is bound by any contract ...
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