Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 18

Liability Based on Actual or Apparent Authority. Summerall Electric Co. and other subcontractors were hired by National Church Services, Inc. (NCS), which was the general contractor on a construction project for the Church of God at Southaven (the Church). As work progressed, payments from NCS to the subcontractors became later and later until they eventually stopped. The Church had paid NCS in full for the entire project beforehand, but apparently, NCS had mismanaged the project. When payments from NCS stopped, the subcontractors filed mechanic's liens (see Chapter 19) for the value of the work they had performed but for which they had not been paid. The subcontractors sued the Church, contending that NCS was its agent based on either actual authority or apparent authority, and thus the Church was liable for the payments. Was NCS an agent for the Church based on actual or apparent authority, thereby making the Church liable to the subcontractors? Discuss your reasons. [Summerall Electric Co. v. Church of God at Southaven, 25 So.3d 1090 (App.Miss. 2010)]