A person who purports to act as agent for a principal whom both the agent and the third party know to be wholly incompetent is personally liable on a contract entered into with a third person on behalf of such a principal.

Question

Quizplus · Accepted Answer

If the agent knows that the principal is wholly incompetent, the agent cannot use the principal's incompetence as an excuse for not performing the contract, and is therefore personally liable for any obligations under the contract.

A Person Who Purports to Act as Agent for a Principal