Question

Ames, claiming to be an agent of Clar Corporation, makes a contract with Trimon in the name of Clar Corporation. Later, Clar Corporation, for the first time, learns what Ames has done and notifies Trimon of the truth that Ames was not an agent of Clar Corporation.
Which of the following statements is incorrect?

a. Clar Corporation may ratify this contract if it does so with the entire contract.
b. Trimon may withdraw from the contract before Clar attempts to ratify it.
c. Clar Corporation may ratify this contract by performing under the contract without stating that it is ratifying.
d. Trimon may enforce this contract even if Clar Corporation does not wish to be bound.

Answer 1

Answer:

The correct option is D: Trimon may enforce this contract even if Clar Corporation does not wish to be bound.

Explanation:

As long as Ames had no actual, implied, or express authority, it is impossible for Trimon to enforce the contract. Furthermore, under agency law, it is required that the contract is either ratified completely, or its not ratified at all, and hence option A is correct. It is also possible for Trimon to withdraw from the contract because Ames has no authority unless Clar ratisfies the contract entirely, hence B is a correct statement. Also Clar can ratify the contract by actions, without having to state it, making C a correct statement also. The only incorrect statement is D.