Which statement best describes the effect of the clause 'The agent is liable for final payment' in a contract?

Which statement best describes the effect of the clause 'The agent is liable for final payment' in a contract?

• A. The agent is responsible for the final payment
• B. The client is responsible for the final payment
• C. The project owner is responsible
• D. Final payment is independent of the contract

Answer: (A)

The statement assigns the final payment obligation to the agent, making the agent the one who must ensure the last payment is made. In other words, the agent functions as a guarantor for that final amount. If the principal (the client or project owner) doesn’t pay, the party owed money can seek payment from the agent rather than from the client, because the contract explicitly makes the agent liable. This doesn’t say the client is responsible, nor that the project owner bears the obligation, and it certainly doesn’t say the final payment is independent of the contract.

The statement assigns the final payment obligation to the agent, making the agent the one who must ensure the last payment is made. In other words, the agent functions as a guarantor for that final amount. If the principal (the client or project owner) doesn’t pay, the party owed money can seek payment from the agent rather than from the client, because the contract explicitly makes the agent liable. This doesn’t say the client is responsible, nor that the project owner bears the obligation, and it certainly doesn’t say the final payment is independent of the contract.