Olivia is Physicians Clinic agent and is not authorized to sign checks or notes on its behalf. Despite the lack of authority, Olivia issues a note "payable to the order of Loan Company [signed] Physicians Clinic, by Olivia." Liability on this note extends to
A) Physicians Clinic.
B) Olivia.
C) Loan Company.
D) no one.

Question

Olivia is Physicians Clinic agent and is not authorized to sign checks or notes on its behalf. Despite the lack of authority, Olivia issues a note "payable to the order of Loan Company [signed] Physicians Clinic, by Olivia." Liability on this note extends to​
A) ​Physicians Clinic.
B) ​Olivia.
C) ​Loan Company.
D) ​no one.

Quizplus · Accepted Answer

Olivia, as an agent of Physicians Clinic, does not have the authority to sign checks or notes on behalf of the company. Therefore, Olivia is personally liable for the note she issued. Neither Physicians Clinic nor Loan Company would be liable for this unauthorized act.

Olivia Is Physicians Clinic Agent and Is Not Authorized to Sign