Three-Seventy Leasing Corporation v. Ampex Corporation (5th Cir. 1976) (p.22)
FACTS
Company policy requires that Ampex (Mueller) sign an agreement entered into by
Joyce. Mueller didn’t sign. However, there was evidence that Mueller was trying to
get the benefit of the contract without being bound.
RULES
-Test for apparent authority is whether a reasonably prudent person would have
supposed that the agent has the authority he purports to exercise.
o Note: Listening to the agent’s representations of her authority may not be
enough. If it is reasonable to do so, the third party should check with the
principal.
ANALYSIS
This case shows that if you sit on a contract, you may still be responsible for it.
FACTS
Company policy requires that Ampex (Mueller) sign an agreement entered into by
Joyce. Mueller didn’t sign. However, there was evidence that Mueller was trying to
get the benefit of the contract without being bound.
RULES
-Test for apparent authority is whether a reasonably prudent person would have
supposed that the agent has the authority he purports to exercise.
o Note: Listening to the agent’s representations of her authority may not be
enough. If it is reasonable to do so, the third party should check with the
principal.
ANALYSIS
This case shows that if you sit on a contract, you may still be responsible for it.
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