The 1934 Act imposes disclosure requirements on corporations ...

[joblessjake]

The 1934 Act imposes disclosure requirements on corporations issuing new securities.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Undisclosed Principal. John Dunning was the sole officer of the R. B. Dunning Co and was responsible for the management and operation of the business. When the company rented a warehouse from Samuel and Ruth Saliba, Dunning did not say that he was acting for the firm. The parties did not have a written lease. Business faltered, and the firm stopped paying rent. Eventually, it went bankrupt and vacated the property. The Salibas filed a suit in a Maine state court against Dunning personally, seeking to recover the unpaid rent. Dunning claimed the debt belonged to the company because he had been acting only as its agent. Who is liable for the rent, and why?

[234sdffa]

Answer to Question 1

FALSE

Answer to Question 2

Undisclosed principal
The court found that Dunning had agreed to be personally liable for the rent at the outset of his lease with the Salibas. The court ruled in favor of the Salibas, and Dunning appealed. The Supreme Judicial Court of Maine affirmed. The state's highest court pointed out that for an agent to avoid personal liability on a contract negotiated in his principal's behalf, he must disclose not only that he is an agent but also the identity of the principal. Otherwise, the party dealing with the agent may understand that the agent intends to pledge his personal liability and responsibility in support of the contract. In this case, Dunning did not make clear the fact of his agency to the Salibas at the time he entered into a contract with them, and he thereby led the Salibas reasonably to believe that he was personally promising to pay the rent.