Scenario: Brenda is purchasing agent for Commodities Corp. Dennis, a Commodities

Question

Scenario: Brenda is purchasing agent for Commodities Corp. Dennis, a Commodities corporate officer, gave Brenda written authority to buy for Commodities Corporation as many computers and support devices as necessary. Dennis signed the written authority document. The next day, Dennis called Brenda and told her to buy only 50 notebook computers and nothing else.

Brenda went to E-Products, Inc. the next day, showed the written authority from Dennis to E-Products and entered into a written contract with E-Products to buy 60 notebook computers and a selection of printers and scanners to support the computers. E-Products promptly shipped the order to Commodities.

Dennis claims Commodities is not liable to E-Products for the sale because, Dennis claims Brenda exceeded her agency authority and thus was not acting as a Commodities agent in the purchase with E-Products.

A. Is Commodities liable to E-Products under the sales contract for the computers, printers and scanners? Why or why not?

B. Is Brenda personally liable to E-Products to pay for the computers, printers and scanners? Why or why not?

C. Is Brenda liable to Commodities for exceeding her agency authority and thus liable for paying Commodities for the purchases? Why or why not?

Explanation / Answer

(A)

Commodities is liable because of the fact that Brenda had a documented contract from Dennis that gave her the power to buy the goods or products despite the fact that Dennis called the day after to advise her that she ought to just purchase the 50 PCs. She represents her as an agent of the company.

(B)

Brenda is not liable to e-products to pay for the computers, printers, and scanners. Since she was having a written authority to purchase anything, which is necessary, thus the company is liable to pay for the commodities, not Brenda.

(C)

Brenda can be liable for paying for the commodities for the purchase, even she have the authority to buy goods as a representative of the company. But, if she exceeds her authority by purchasing more than limited products, then she would be liable to pay for the commodities.

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