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Question
Iris represents Drew, an eccentric billionaire who lives alone on a Pacific Island. Although Drew passes away on May 1st, this fact is not revealed until June 1st. On May 15th, Iris enters into a contract with Peggy on behalf of Drew. What is the legal liability, if any, of Iris to Peggy?
A. Iris is liable for a breach of actual warranty of authority.
B. Iris is liable for a breach of implied warranty of authority.
C. Peggy may enforce the contract since Drew's death was unknown, thus Iris has no liability.
D. Peggy may enforce the contract against Iris since she represented a nonexistent principal.
Answer
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