Question

Case: Without Brown's knowledge, Jones, who frequently purchased lumber on Brown's behalf, purchased a large quantity of plywood from Smith as agent for Brown. Jones later advised Brown of the purchase.

If Brown was bound by the contract that he had not authorized Jones to make, Brown would be entitled to take legal action against Jones for any loss Jones suffered.

True

False

If Brown had died before the contract was negotiated by Jones, the purchase agreement would be unenforceable, because the principal did not exist at the when the agreement was made.

True

False

Question 7 (1 point)

If Brown had died the day before the contract negotiated by Jones was made, Smith would be entitled to sue Brown's estate to enforce the agreement.

True

False

Brown is bound by the contract made by Jones, because Jones had apparent authority to purchase the lumber on Brown's behalf.

True

False

Answer 1

1. True.

Brown may sue John for the losses he may incur as a result of the contract.

2. True.

If the prichupal dies ,the agent can't bound the principal to any contract.

3. False.

If the principal dies ,the authorities are revocated as soon as that happens which implies that Jones does not even have the apparent authority.

4. True

Frequent dealings on behalf of the brown must have indicated an authority which did not actually exist. This is called apparent authority and brown is bound by such authority.