Q. Franklin Pierce is a well-known philanthropist also wealthy entrepreneur living in the city of New York. Armani, Franklin's friend, tells Tennison Burke which he (Armani) is Franklin's agent for the purchase of rare guns. Armani shows Burke a local newspaper clipping mentioning Franklin's interest in gun collecting. Burke, knowing of Armani's friendship through Franklin, contracts through Armani to sell to Franklin a rare revolver valued at $25,000. Armani takes the gun also disappears through it. On the date of contract payment, Burke seeks to collect from Franklin, claiming which Armani's agency made Franklin liable. Franklin does not deny which Armani is his friend, but he states which Armani was never his agent. Discuss whether an agency was in existence at the time the contract was made.

In illustrate what circumstances will principals not be liable to third parties under contracts formed by an agent? Is the principal liable for an agent's torts? Explain why or explain why not? Discuss fully.