Which of the following statements is true of a principal's liability for notice and payments to the agent?
A) The agent is not legally bound to inform the principal of knowledge gained in the course of his or her responsibilities.
B) Payment to the agent of a debt owed to the principal discharges the debt if the agent has authority to receive such payments.
C) An agent who makes over-the-counter sales is viewed as having express authority to collect for the goods.
D) The principal is not bound by the information that is passed on by the agent if it does not relate to the scope of the agent's responsibilities and authority.

Question

Quizplus · Accepted Answer

Generally, notice to the agent is notice to the principal if it relates to the business of the agency. If the information does not relate to the scope of the agent's responsibilities and authority, the principal is bound only by the information that is actually passed on by the agent. Payment to the agent of a debt owed to the principal discharges the debt if the agent has authority to receive such payments. This is true even if the agent steals the money.

Which of the Following Statements Is True of a Principal's