Question

Ann is interested in purchasing Ted's factory. Since Ann is a poor negotiator, she hires Mary to negotiate the purchase price. Identify the parties to this transaction.

a) Mary is the principal and Ann is the agent.
b) Ted is the principal and Ann is the agent.
c) Mary is the agent while Ted and Ann together are principals.
d) Ann is the principal and Mary is the agent.

Answer 1

Since Mary is hired to do the negotiations, the answer D.) is correct.

Answer 2

d) Ann is the principal and Mary is the agent.

Step-by-step explanation:

In the given condition, Ann is unable to do negotiate so she hires Mary who works for Ann.

Ann is the principal as she is interested to purchase Ted's factory which represents the main role of the agreement. Without Ann, the agreement would not be completed whereas Mary is the agent as she does the negotiations on behalf of Ann.

Hence, option d is correct