1. Liability of Agent

2. Effect on Principal
Determined by state law.
Problem 147, p. 463

3. Effect on Agent Principal = MegaStore, Inc.
Agent = Nancy, the bookkeeper authorized to sign notes and checks
Issue = Is Nancy personally liable when she signs notes and checks for MegaStore?

4. Avoiding personal liability
Agent (Nancy) can avoid personal liability if:
1. Identify principal (MegaStore, Inc.) on the instrument, and

5. Avoiding personal liability
Agent (Nancy) can avoid personal liability if:
1. Identify principal (MegaStore, Inc.) on the instrument, and
2. Indicate agent (Nancy) is signing for principal (MegaStore, Inc.) for example: Nancy, as agent for MegaStore, Inc. Nancy, bookkeeper. MegaStore, Inc. by Nancy

6. Liability if not avoided
To HDC
Agent is liable unless HDC on notice that agent not intended to be liable.

7. Liability if not avoided
To non-HDC
Agent is presumed liable but can show that original parties did not intend agent to be liable.

8. Special rule for checks
Agent not liable if principal’s name is on the check, even if agent not indicate agency status.

9. Problems Problem 148 – p. 464 Problem 149 – p. 467