Question

Andrea hired Jack to be the sales agent for her paintings. However, in a month's time, she terminated the agency with Jack. Harold, a customer who had dealt with Jack earlier, was not aware of the termination. Harold approached Jack to buy a painting and wrote him a check of $5,000, the advance payment for the painting which Jack promised would be delivered in two weeks. When Jack did not contact Harold later, Harold demanded that Andrea honor the contract, since Jack sold the picture as her agent. Which of the following is true of this situation?
A. Since Jack had apparent authority, Andrea is liable to honor his contract with Harold.
B. Harold's duty was to contact Andrea. His failure to do this removes her liability to honor the contract.
C. Jack had express authority as Andrea's agent, which is not terminated with the termination of their agency.
D. As Andrea terminated the agency with Jack in violation of his rights, Jack has the direct authority to sell her paintings.

Answer 1

Answer:

A. Since Jack had apparent authority, Andrea is liable to honor his contract with Harold.

Explanation:

The Contract defines that when two or more persons bound for a purpose legally.

Contract = Agreement + enforceble

Here as per the given situation Andrea hired Jack as the sales representative for her portraits. She suspended the organisation with Jack though, in a month's time.

Harold, a client who had previously worked with Jack, was not informed of the closure. Harold contacted Jack to purchase a painting, and gave him a $5,000 check, the painting advance payment that Jack agreed would be shipped in two weeks.

As Jack later failed to reach Harold, Harold requested that Andrea uphold the deal, as Jack sold the picture as her agent

Andrea is liable to uphold his deal with Harold, as Jack had obvious authority.