Exam 20: Relationship With Third Parties

A principal is contractually bound to a third party if the agent acts without any authority but the principal ratifies the contract.

Jack was fired by Larry but decided to try to win back his job as agent by getting a big new contract.He approached Sharon,a new client,and made a pitch to sell Larry's product.Sharon agreed to buy 100.Jack tells Larry.What are the legal consequences?

Apparent authority is actual authority.

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the course of his employment.

The purpose of an agency relationship is to allow principals to extend their business activities.

Discuss apparent authority and some common ways in which it might arise.

A principal who authorizes his agent to commit a tortious act with respect to the property or person of another is not liable for the injury or loss sustained by that person.

Arthur,who works for Peter,sees what he thinks is a good deal for Peter.Without asking whether he has authority to negotiate the deal,Arthur enters into a contract on Peter's behalf.Peter says later that he isn't interested.Is Peter liable on the contract? Is Arthur liable on the contract? Explain.

Southern Furniture Co.hired Chuck to drive a company truck and deliver furniture.Chuck had a spotless driving record and did well on his driving test.Belinda ordered a chair from Southern Furniture Co.and arranged for its delivery on her lunch hour.Belinda was at home when Chuck delivered the chair.After delivering the chair,Chuck brutally assaulted Belinda,causing physical and psychological injuries.Chuck was convicted in the criminal courts.During the trial it was revealed that Chuck had been in a mental institution for the criminally insane for two years because he had assaulted his mother and other women.He also had a lengthy criminal rap sheet involving theft crimes.Belinda sought compensation for her physical and psychological injuries from both Chuck and Southern Furniture Co.in civil court.Discuss the probable outcome of this case with regard to the issues of: (a)respondeat superior and (b)general tort liability of principals for the unauthorized acts of their agents.

Leonard is a traveling salesman for Bighorn,Inc.He calls on Ralphyl,one of his regular accounts,in order to solicit another order.While in the store,Leonard collects a past due account for Bighorn,but he doesn't get another order.It has been a bad day in which Leonard hasn't had any orders.He is so angry about this when he leaves the store that he drives negligently and hits a pedestrian with his car.In this case:

John agreed to build a new house for Ted.Unknown to John,Ted was an agent for Russell Realty.John built the house as agreed.When Ted refused to pay,John became aware that Ted was an agent for Russell.John wants to sue on the contract.Under the Second Restatement,John:

The doctrine of ____ is the basis for an employer's liability for an unauthorized tort committed by his employee in the course of his employment.