Wallace, an agent for Lux, made a contract with Doolittle which exceeded Wallace’s authority.  If Lux wishes to hold Doolittle to the contract, Lux must prove that
A. Wallace was acting in the capacity of an agent for an undisclosed principal.
B. Lux ratified the contract before withdrawal from the contract by Doolittle.
C. Wallace was Lux’s general agent even though Wallace exceeded his authority.
D. Wallace believed he was acting within the scope of his authority.
Answer:B
B is corrent because if an agent acts without authority, neither the principal nor the third party is bound to perform the contract. However, if Lux ratified Wallace’s unauthorized act before Doolittle withdrew from the contract, Doolittle would be bound by the agreement.
A is incorrect because the fact that Wallace was acting for an undisclosed principal would not bind Doolittle if Wallace, the agent, was acting outside his authority.
C is incorrect because the contract exceeded Wallace’s authority and therefore, Doolittle is not bound.
D is incorrect because Wallace’s belief as to the extent of his authority has no bearing on whether Doolittle, the third party, is bound to the agreement. Doolittle is not bound where Wallace exceeded his authority.