Question

In a normal agency relationship where the agent acts within his authority, a binding contract within his authority is usually created between ___________.

• A. the parricidal and agent
• B. third party and agent
• C. the principal and a third party
• D. all of the above

Answer 1

The correct option is C the principal and a third party

In a normal agency relationship the agent can contractually bind his principal to a third party, providing that the agent acts within his authority. Later if the agent drops out of the transaction, he/she leaves a binding contract between his/her principal and the third party.