• Chapter 38: Relationships Between Principal and Agent
• Chapter 39: Liability of Principal and Agent; Termination of Agency
Q1. Lisa is a purchasing agent for Commodities Exchange Corporation. Darren, a Commodities corporate officer, gives Lisa written authority to buy for the firm as many computers and peripheral devices as necessary. The next day, Darren calls Lisa and tells her to buy only fifty note¬book computers and nothing else. Lisa shows the written authority to E-Products, Inc., and enters into a contract with E-Products to buy sixty note¬book computers and a selection of printers, scanners, and extra storage media. E-Products ships the order to Commodities. Is Commodities li¬able to E-Products under the contract? Is Lisa liable? In each case, if so, why? If not, why not?
Q2. Southern Vittles, LLC, hires Kim to act as its agent to buy a ten-acre tract of land from Alex for $1,000 per acre. Southern Vittles does not want Alex to know that it is the principal or that Kim is its agent. Southern Vittles wants the land for a new fast-food restaurant, and believes that Alex may not sell the land for that purpose or may demand a premium price. Kim makes the purchase, signing only her name to the contract as the buyer and not disclosing to Alex the agency relationship. The transfer of the deed is to occur on May 1. Alex learns of Southern Vittles' identity on April 15. Can Alex legally refuse to deed the property on May 1? Explain.