Question

Company A hired Nick as an agent and gave him a letter authorizing him to make purchases on behalf of the company. In a separate email, the company explained to Nick that he could only make purchases for 100,000 or less. In other words, 100,000 was the reservation price for his negotiations. Nick proceeded to negotiate a contract with a new supplier, B, in which he purchased goods for 95,000. Nick showed B the letter of authority from the company but did not mention the 100,000 limitation that the company explained in the email.
A. Company A is bound by the contract because Nick had express authority.
B. Company A is bound by the contract because Nick had apparent authority.
C. Company A is not bound by the contract because of illegality.
D. Company A is not bound by the contract because of unconscionability.
E. Company A is not bound by the contract because of fraud.
F. None of the above.

Answer 1

Answer:

C. Company A is not bound by the contract because of illegality