An agent who makes a contract for a disclosed principal whose contracts are voidable for lack of contractual capacity:
A) is never liable to the third party.
B) can be liable to the third party under certain circumstances.
C) is liable to the third party only if the agent warrants the principal has capacity.
D) is ordinarily personally liable to the third party if the principal avoids the contract.

Question

Quizplus · Accepted Answer

An agent can be liable to the third party under certain circumstances, especially if the agent knew or should have known that the principal lacked the capacity to contract, and this lack of capacity led to the contract being voidable.

An Agent Who Makes a Contract for a Disclosed Principal