A principal is contractually liable to a third party if that party enters into a contract presented by an agent with apparent authority to act for the principal.

Question

Quizplus · Accepted Answer

This statement is true. When an agent presents themselves as having the authority to act on behalf of the principal, the third party has the right to assume that the agent has the necessary authority. The principal will be held liable for any contracts that the agent enters into with a third party, even if the agent exceeded their actual authority.

A Principal Is Contractually Liable to a Third Party If