LECTURE #3: Contract Liability of Principal and Agent
Assignment: Read textbook pages 1012-17 and supplement pages 8-10. Brief the Opp v. Wheaton Van Lines, Inc. and African Bio-Botanica, Inc. v. Leiner cases. Use this outline to add your notes as you listen to the accompanying audio lecture posted on Canvas/Modules. Submit your briefs for the Opp and African Bio-Botanica cases on Canvas/Assignments.
Participation: You can earn participation points by participating in the chat discussion and by answering the question posted on Canvas/Discussions. Doing both or either is voluntary on your part, but both are time-limited opportunities.
OUTLINE
I. Contract liability of the principal
A. Actual authority
1. Express actual authority
2. Implied actual authority
B. Apparent authority
C. Ratification
D. The Opp case
Analyzing whether an Agent had authority to enter into contract and bind the Principal:
1. Did the Agent have express authority to act for the Principal?
2. If not, did the Agent have implied authority to act for the Principal?
3. If not, did the Agent have apparent authority to bind the Principal?
4. If the Agent had no actual or apparent authority, did the Principal ratify the contract?
II. Contract liability of the agent
A. Disclosure of the principal
B. Liability by agreement
C. The African Bio-Botanica case
Disclosure of the principal Knowledge of the third party Result
Principal fully disclosed Third party knows of principal’s existence and identity Principal is liable, if agent has actual or apparent authority
Principal partially disclosed Third party knows of principal’s existence but not identity Agent is personally liable, unless agent had actual or apparent authority and third party agrees otherwise
Principal undisclosed Third party does not know of principal’s existence and identity Agent is personally liable
Nonexistent principal Third party incorrectly believes agent is acting for a principal Agent is personally liable
Review the topic of agent liability for contracts:
https://www.garrettham.com/agent-liability-to-third-party/
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