If an authorized agent properly signs a contract for a principal, the principal will be bound by the contract, but the agent will have no personal liability on the contract. This is how an agency relationship is supposed to work: When the agent signs the contract, it's as if the principal alone was actually there and signed the contract personally. However, under certain circumstances, the agent will be personally liable on the contract. Whether the principal is also liable on the contract is a different question. Sometimes an agent will end up personally liable on the contract because the agent lacks an understanding of the applicable law. Other times, this is due to arrangement between the principal and the agent. In this assignment, you'll explore the circumstances as to when an agent will be personally liable on a contract entered into on behalf of a principal