Penny,acting as an agent for Felipe,enters into a contract with Tanya,but Tanya knows that Penny does not have authority to enter into contracts on Felipe's behalf.Is Penny liable for making an unauthorized contract?
A)No,because Penny lacks implied authority to enter into the contract.
B)No,because the third party knows the agent lacks authority.
C)No,because the agent lacks express authority to enter into the contract.
D)Yes,because Penny entered into the contract while acting as an agent.

Question

Quizplus · Accepted Answer

An agent is not liable for making an unauthorized contract if the third party actually knows the agent lacks authority.

Penny,acting as an Agent for Felipe,enters into a Contract with Tanya,but