The key to determining whether a principal is liable for contracts made by his agent is the amount of compensation paid to the agent.

Question

Quizplus · Accepted Answer

The amount of compensation paid to the agent is not the key factor in determining whether a principal is liable for contracts made by the agent. The key factors are the agent's authority to act on behalf of the principal and whether the agent acted within that scope of authority.

The Key to Determining Whether a Principal Is Liable for Contracts