If an agent makes a contract with a third party that expressly excludes the principal from the contract, which statement effectively describes the liability of the principal?
A) The principal is liable on the contract because it is unconscionable to exclude a principal from a contract.
B) The principal is liable on the contract only if the principal is an unidentified principal.
C) The principal is liable on the contract only if the principal is a partially disclosed principal.
D) The principal is liable on the contract unless the principal gave the agent authority in writing to make the agreement with the third party.
E) The principal is not liable on the contract.

Question

Quizplus · Accepted Answer

The principal is not liable on the contract if the contract expressly excludes the principal, as the agreement is between the agent and the third party, leaving the principal without obligations under that specific contract.

If an Agent Makes a Contract with a Third Party