Legal Principle: A master shall be liable for the fraudulent acts of his servants committed in the course of employment. However, the master and third parties must exercise reasonable care in this regard.Factual Situation: Rahul was a door to door salesman with United Manufacturing Company (the Company). The Company was manufacturing Water Purifiers. Rahul, along with the Company's products, used to carry Water Purifiers manufactured by his Cousin in a local Industrial Estate. He used to sell the local product at a lower rate giving the impression to the buyers that he is offering a discount on the Company's product. The Company Management detected the fraudulent activity of Rahul and dismissed him from service. Rahul still continued to carry on with his activity of selling the local product pretending that he was still a salesman of the Company. Several customers got cheated in this process. The fraud was noticed by the Company when the customers began to complain about the product. The customers demanded the Company to compensate their loss. (CLAT 2017)

Each question consists of legal principle(s) (hereinafter referred to as 'principle') and facts. Such proposition may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this section. You have to apply the principles to the given facts to arrive at the most reasonable conclusion. Only one of the alternatives, i.e., (A), (B), (C), or (D) is the most reasonable conclusion. Remember: you must not rely on any principle except the principles that are given for every question.