Explain reasonably believes that a has authority to contract

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Reference no: EM1361063

A is employed to purchase goods on his own credit for P. When A goes bankrupt, this seriously impedes his ability to serve P. Nonetheless, A buys some goods from T on P's behalf. T knows nothing about A's financial condition, and reasonably believes that A has authority to contract. The question is whether P is bound to this contract. Which of the following is true? Assume, as is obvious, that P did nothing to inform T that the agency had ended (if it did end).

A) P is liable on the contract even though the agency terminated.

B) P is liable on the contract because the agency remained in existence.

C) P is liable on the contract because he ratified it by not notifying T.

D) P is not liable on the contract because the agency terminated, and this also terminated A's express, implied, and apparent authority.

Reference no: EM1361063

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