Audio Science Company's agent Bailey is authorized to draw checks on Audio Science's account in Citizen Bank.The checks are preprinted with the company name.Bailey writes a check "pay to the order of Darlene [signed] Bailey." Darlene presents the check for payment.If Citizen Bank dishonors it,liability extends to
A)no one.
B)Audio Science and Bailey.
C)Audio Science only.
D)Bailey only.

Question

Quizplus · Accepted Answer

Bailey is acting as an agent for Audio Science Company, and the check is drawn on the company's account. Therefore, the liability for the dishonored check extends to Audio Science only, as Bailey is not personally liable when acting within the scope of their authority as an agent.

Audio Science Company's Agent Bailey Is Authorized to Draw Checks