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A authorizes B to buy 1,000 bales of cotton on account of A, and to pay for it out of A's moneys…

Section 204 bars a principal from revoking an agent's authority after it "has been partly exercised, so far as regards such acts and obligations as arise from acts already…

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A authorizes B to buy 1,000 bales of cotton on account of A, and to pay for it out of A's moneys remaining in B's hands. B buys the cotton in his own name, so as to make himself personally liable for the price. A then revokes B's authority to pay for the cotton. Is the revocation effective?

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Correct answer C

Section 204 bars a principal from revoking an agent's authority after it "has been partly exercised, so far as regards such acts and obligations as arise from acts already done in the agency". Illustration (a) to section 204 holds that A cannot revoke B's authority so far as regards payment, because B has made himself personally liable for the price. Reasonable notice under section 206 governs compensation for revocation, not whether a partly exercised authority may be withdrawn.

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