Question

Eleonore and Henry form a partnership to operate a horseback-riding business. The two partners file a duly executed statement of authority indicating that only Eleonore has the authority to buy and sell horses on behalf of the partnership. James, a regular customer who was unaware of the statement of authority, asks Henry if he can buy one of the horses from the partnership. Henry agrees to sell James a horse. When Eleonore finds out about the sale, she is furious, and demands that Henry retrieve the horse from James. Is Henry's sale of the horse binding

Answer 1

Answer:

Yes, because Henry had authority to sell the horse

Explanation:

In the given scenario Henry had apparent authority to sell the horse.

Apparent authority is the ability of an agent to act on behalf of a principal even though this is not clearly stated out. It is as a result of a third party assuming the agent has such power.

James rightly assumed Henry had the power to sell the horse.

So the sale of the horse is binding on Eleonore.