Question

Jane and Joseph Sechrist signed a contract to have a swimming pool built in their backyard for $10,000. The salesman for the pool company signed the contract as well on a space marked "Salesperson." Two days after the contract was signed, the salesman called the Sechrists back and asked them to come in and sign a new contract for $11,000 because the vice president had not approved the original price. Jane has checked the contract and discovered that there is no language that requires the approval of anyone other than the salesperson. Jane and Joseph can have their pool built for $10,000 because: a. the salesman had at least apparent authority to bind the pool company. b. of misrepresentation. c. the pool company has ratified the contract. d. the pool company was bound once Jane and Joe signed the contract.

Answer 1

Answer:

A) the salesman had at least apparent authority to bind the pool company.

Explanation:

In this case, the salesperson (or the agent) apparently had the authority to sing a contract representing the pool company. The contract even had a specific place for him to sign.

Apparent authority is defined as a situation where a reasonable person (Jane and Joseph) will believe that the agent (salesperson) has authority to act on behalf of the principal (pool company). If such a situation exists, then the principal is bound by the agent's actions.