MEE Practice Questions - Multistate Essay Examination Exam

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A principal authorizes an agent to sell a single tractor for at least $40,000. The agent signs a contract selling the tractor for $35,000. Is the principal bound to the buyer?

Yes, because the agent had apparent authority to sell the tractor No, because the agent exceeded the express limit on actual authority and the buyer cannot rely on apparent authority absent a manifestation by the principal Yes, because principals are always liable for the acts of their agents within the general scope of employment No, because all agency contracts must be in writing under the Statute of Frauds

Correct Answer:

No, because the agent exceeded the express limit on actual authority and the buyer cannot rely on apparent authority absent a manifestation by the principal

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