Question

1. Brenda is a purchasing agent for Commodities Exchange Corporation. Dennis, a Commodities corporate officer, gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary. The next day, Dennis calls Brenda and tells her to buy only fifty notebook computers and nothing else. Brenda shows the written authority to E-Products, Inc., and enters into a contract with E-Products to buy sixty note-book computers and a selection of printers, scanners, and extra storage media. E-Products ships the order to Commodities. Is Commodities liable to E-Products under the contract? Is Brenda liable? In each case, if so, why? If not, why not?

Answer 1

Answer:

Since Brenda is Commodities's agent, then Commodities is liable to E-Products for the products purchased by Brenda. Brenda is not liable to E-Products because she has expressed authority to purchase the equipment (written authorization). The principal (Commodities) is liable for the actions carried out by their agent (Brenda). Dennis's call limited Brenda's expressed authority, but it did not limit her implied authority with respect to this purchase because E-Products wasn't notified about the change.

This doesn't mean that Brenda did the right thing, she is still liable to Commodities because she exceeded her authority.