Final answer:
When a contract is ambiguous regarding the agent's capacity, there is a presumption that the agent signed in a representative capacity, making the agent and principal both liable. Parol evidence may be admissible to establish the agent's capacity. It is important to consult a legal professional for specific guidance.
Step-by-step explanation:
When a contract is ambiguous regarding whether the agent has signed in a representative or an individual capacity, the presumption is that the agent signed in a representative capacity. This means that the agent was acting on behalf of the principal and not in their personal capacity. In such cases, both the agent and the principal will be liable on the contract.
Parol evidence, which refers to oral or written evidence outside the four corners of a written contract, may be admissible to establish the character in which the agent was acting. This means that parties can provide additional evidence, such as witnesses or past dealings, to clarify the intent of the agent.
It is important to note that this is a general rule and the specific language and circumstances of the contract may override this presumption. Consulting a legal professional can provide more accurate guidance based on the specific situation.