19. Ted is a janitor at Big Deal, Inc. One night, Ted is cleaning the boss\'s of

Question

19. Ted is a janitor at Big Deal, Inc. One night, Ted is cleaning the boss's office and sits in the boss's chair. At that moment, a salesman walks in, thinks Ted is a manager, and offers to sell Big Deal, Inc., 700 widgets for $100 each. Ted thinks this sounds like a good deal, assumes the boss will be pleased, and signs the contract as an agent for Big Deal, Inc. The boss discovers this deal the next day and is angry because widgets cost $27 each. If Big Deal is obligated under the agreement, it's based on __________ authority.

A. apparent

B. implied

C. actual

D. express

Explanation / Answer

correct option is A"" -Apparent

Apparent authority refers to a situation where a company or a third party assumes that an agent has a authority to act on behalf of corporation he is representing though he has not been appointed for such representation.

In the given case,Ted has no authority to accept any deal on behalf of big deal however salesman assumes him to be an agent of big deal and signs the contract .

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