Book Opener

Consequently, the key to determining implied authority is to focus onwhat took place between the principal and the agent.Going Beyond Implied AuthoritySometimes a dispute arises over what powers can be implied fromthe express authority given to the agent. The court draws the line bysaying that implied authority must be “reasonably derived from theexpress power.” What is reasonable in a given situation is determined bylooking at the actions that are customarily performed by other agents insimilar situations.Example 3. Abe Eney decides that purchasing a new suit willhelp him sell Joanna DiBlasi’s motorcycle. He purchases a suitand sends the bill to Joanna. Joanna would probably not haveto pay for Abe’s suit because such expenses are not typically partof an agent’s authority in this kind of sales situation.Apparent AuthorityApparent authority exists when the principalhas somehow led a third party to believe that anonagent is an agent, or that an agent has a powerthat he or she does not truly have. In contrast toimplied authority, the key to understanding apparentauthority is to focus on what happenedbetween the principal and a third party. As discussedin Chapter 18, apparent authority is sometimesreferred to as agency by estoppel becausethe principal cannot deny that the nonagent actedon his or her behalf.APPARENT AUTHORITYApparent authority exists when the principal hassomehow led a third party to believe that a nonagentis an agent. Is the management of a departmentstore responsible if an impostor poses as a salespersonand absconds with a customer’s cash?Example 4. Pierre Trudeau told Theresa Jacksonto come to his jewelry store at 9 A.M. onTuesday. He said that someone would be thereto sell her a diamond ring. At 8:30 A.M. onTuesday, Pierre left the shop to run a few errandsand asked his niece, Amy, to keep an eyeon the store. Theresa arrived at 9 A.M., and assumingthat Amy was a clerk, purchased aunique diamond ring from Amy. When Pierrereturned, he was upset because that ring hadbeen promised to another customer. He calledTheresa, but she refused to return the ring.Theresa was within her rights because Pierrehad created a situation that caused her toassume that Amy had authority to sell the ring.416 Unit 4: Being an Agent and Getting a Job