Undisclosed Principal. John Dunning was the sole officer of the R. B. Dunning Co and was responsible for the management and operation of the business. When the company rented a warehouse from Samuel and Ruth Saliba, Dunning did not say that he was
acting for the firm. The parties did not have a written lease. Business faltered, and the firm stopped paying rent. Eventually, it went bankrupt and vacated the property. The Salibas filed a suit in a Maine state court against Dunning personally, seeking to recover the unpaid rent. Dunning claimed the debt belonged to the company because he had been acting only as its agent. Who is liable for the rent, and why?
Undisclosed principal
The court found that Dunning had agreed to be personally liable for the rent at the outset of his lease with the Salibas. The court ruled in favor of the Salibas, and Dunning appealed. The Supreme Judicial Court of Maine affirmed. The state's highest court pointed out that "for an agent to avoid personal liability on a contract negotiated in his principal's behalf, he must disclose not only that he is an agent but also the identity of the principal." Otherwise, "the party dealing with the agent may understand that [the agent] intends to pledge his personal liability and responsibility in support of the contract." In this case, "Dunning did not make clear the fact of his agency to the Salibas at the time he entered into a contract with them," and "he thereby led the Salibas reasonably to believe that he was personally promising to pay the rent."
You might also like to view...
When analyzing data, looking at ________ will indicate patterns taking place over time
A) mean B) causation C) median D) correlation E) trends
Partnership income can be divided solely on the basis of salaries or interest
Indicate whether the statement is true or false
The controller for Tires and More, Inc has recorded the following transactions during the month: the purchase of supplies on credit, $4,200; receipt of a bill for utilities for the month which is due on the 15th of the next month, $1,200; and, partial payment on the balance due for supplies, $800. What is the balance in the Accounts Payable account at the end of the month assuming a beginning
balance of $0, and is the balance a debit or a credit? A) $4,600 debit. B) $4,600 credit. C) $3,400 credit. D) $5,400 credit.
What is data?
A. Data converted into a meaningful and useful context. B. Skills, experience, and expertise, coupled with information and intelligence, that create a person's intellectual resources. C. Raw facts that describe the characteristics of an event or object. D. Information collected from multiple sources that analyzes patterns, trends, and relationships for strategic decision making.