alleryStart learning →A principal who made third persons believe an agent's acts were authorised is
Abound by those acts
Bfree of the obligations
Centitled to a refund
Dliable only to the agent
Answer & Solution
Correct answer: A. bound by those acts
Section 237 binds the principal by estoppel where his words or conduct led third persons to believe the agent was authorised.
Keep practising Agency
Browse all Agency questions for CA Foundation, or explore more Businesslaw topics.
Related questions
An agent for sale makes an unauthorised misrepresentation and C buys. The contract isFrauds by agents in matters outside their authorityA tells B not to sell below a set price, but C, unaware, buys below it from B. A isA person who contracted as agent but really acted on his own accountA person untruly claims to be an agent and no ratification follows. He mustA third party induces belief that only the principal is liable. He laterA sells cotton to B and later learns B was agent for C. A may sueWhere the agent is personally liable, the person dealing with him may hold liable