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A, being B's agent for the sale of goods, induces C to buy them by a misrepresentation which B had not…

Section 238 provides that misrepresentations made by agents "acting in the course of their business for their principals" have the same effect on the agreements as if the…

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A, being B's agent for the sale of goods, induces C to buy them by a misrepresentation which B had not authorized him to make. What is the effect on the contract between B and C?

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Correct answer D

Section 238 provides that misrepresentations made by agents "acting in the course of their business for their principals" have the same effect on the agreements as if the principals had made them. Illustration (a) to section 238 holds that the contract is voidable, as between B and C, at the option of C. A was acting in the course of selling B's goods, so the lack of authority for the particular statement does not protect B, and misrepresentation makes a contract voidable rather than void.

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