If an authorized agent properly signs a contract for a principal, the principal will be
bound by the contract, but the agent will have no personal liability on the contract. This
is how an agency relationship is supposed to work: When the agent signs the contract,
it’s as if the principal alone was actually there and signed the contract personally.
However, under certain circumstances, the agent will be personally liable on the
contract. Whether the principal is also liable on the contract is a different question.
Sometimes an agent will end up personally liable on the contract because the agent
lacks an understanding of the applicable law. Other times, this is due to arrangement
between the principal and the agent. In this assignment, you’ll explore the
circumstances as to when an agent will be personally liable on a contract entered into
on behalf of a principal.
• Describe the ways in which an agent can be help personally liable on a contract entered
into on behalf of a principal. Include examples. Examples can come from cases in the
unit, or other cases that you find, or hypothetical examples you make up. Use citations in
APA format to support your work. Writing a little more, including providing background
for your answer, is a way to improve your grade. However, do not include anything on
the liability of a principal on a contract.
• This assignment will be a paper that is 1 – 2 double-spaced pages with proper
• Times New Roman font and font size 12.
• Include at least two references.