Question

Dana, an agent for Evan, signs an agreement on Evan's behalf but neglects to tell Evan that the agreement requires the payment of certain taxes. The government prosecutes Evan for failing to pay the taxes. Evan is:

Option 1: Not liable, because he was not informed of the tax liability by Dana.

Option 2: Liable, because paying taxes is mandated by the Constitution.

Option 3: Liable, because Dana's knowledge is assumed to be known by Evan.

Option 4: Not liable, because he was not given adequate notice.

Answer 1

Evan is liable due to the principle that an agent's knowledge is assumed to be known by the principal, and thus he is responsible for taxes incurred by agreements signed by Dana on his behalf.

Step-by-step explanation:

When Dana, an agent for Evan, signs an agreement on Evan's behalf, Evan is generally considered to have constructive knowledge of the terms of the agreement, including the requirement to pay taxes. In the context of agency law, principals are bound by the acts of their agents performed within the scope of their authority.

Hence, the correct answer is: Option 3: Liable, because Dana's knowledge is assumed to be known by Evan. This is based on the principle that the agent's knowledge is imputed to the principal. Regardless of whether Evan was personally informed, as long as Dana acted within the scope of her authority, Evan is responsible for the tax liability incurred.