Tom, a breeder of livestock, lives in Jefferson City, Tennessee. Tom is knowledgeable about cattle, but had limited means. He is, however, friendly with Ann Melon, a wealthy widow who fancies fine animals. On one or two prior occasions, Tom has purchased cattle for Ann. While visiting his friend Jack, who raises cattle in Loudon, Tennessee, Tom saw some fine specimens. Purporting to act for Ann Melon (but without any authority from her), Tom contracted to buy from Jack three bulls for the sum of $50,000. Later that same day, Tom also agreed on behalf of Ann Melon to buy from Jack a cow for the sum of $10,000. Tom paid $1,000 down on each purchase and signed each sales agreement, “Tom, Agent for Ann Melon.”
When Tom returned to Jefferson City, he told Ann of his actions, explaining that he thought he had found some good buys for her. Ann was less than enthusiastic. She had no interest in the three bulls, but agreed to buy the cow for $10,000. Tom relays the news to Jack. Upset about the series of events, Jack comes to you and asks whether he can hold Ann liable for the agreements made by Tom. What will you tell Jack?
Be sure to identify and discuss all agency issues, including (i) the difference in actual authority, apparent authority and ratification, (ii) whether Ann is liable for the contract for the cow and under what theory, and (iii) whether Ann is liable for the contract for the bulls and under what theory.