Asked by Jennifer Zuniga on Jul 02, 2024
Verified
Newsome Enterprises Ltd. hired Joe as its purchasing agent. Joe was given the authority to purchase up to $20,000 of inventory. He discovered inventory at 50% off the normal cost so purchased $15,000. Is Newsome Enterprises Ltd. bound by Joe's agreement?
A) No, it is not bound, and Joe is liable as it exceeded his authority.
B) It can be bound if it ratifies the contract.
C) Yes, it is bound.
D) None of the responses are correct
Inventory Authority
The granted power or right to oversee and manage the list of items or properties, often within a business context for stock management purposes.
Ratifies
Formally confirms or approves an agreement or treaty, making it officially valid.
Bound
Obligated by law or duty to do something; being in a state of obligation.
- Pinpoint the scenarios where a principal is held responsible for the deeds of an agent.
- Outline the multiple approaches by which an agency connection may be formed.
Verified Answer
LD
Lauren Dewitt5 days ago
Final Answer :
C
Explanation :
Joe acted within his authority by purchasing inventory worth $15,000, which is under the $20,000 limit set by Newsome Enterprises Ltd. Therefore, the company is bound by his agreement.
Learning Objectives
- Pinpoint the scenarios where a principal is held responsible for the deeds of an agent.
- Outline the multiple approaches by which an agency connection may be formed.
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