Question

In: Economics

Look at the case Robinson V Mollele (1875) and discuss whether the agent's authority was an express or implied authority.

Look at the case Robinson V Mollele (1875) and discuss whether the agent's authority was an express or implied authority.


Solutions

Expert Solution

Implied authority is an authority that is not express or written into a contract, but it is authority an agent is assumed to have in order to transact the business for a principal. Implied authority is incidental to express authority since not every single detail of an agent's authority can be spelled out in the written contract. For example, in real estate, express authority means the agent has been given the authority to act on behalf of the principal.

Example of Implied Authority
If a server at a restaurant tells you they can give you a free beverage with the purchase of an entree, they have made a contract with you on behalf of the restaurant business they are representing. The server's authority is implied by the fact that they have been chosen as the sole employee of the business designated to do business with you. Whether or not other employees ultimately get involved in the transaction is immaterial because it is expected that they will be the only person required to complete your business transaction.


In such a situation, if a restaurant manager came to your table and informed you that the server made a mistake and tried to take back the "free beverage with paid entree" offer, the business would actually be in direct violation of a legally enforceable contract made between you, the client, and their employee. They may certainly penalize the employee if they choose, but implied authority legally obliges them to honor the terms of the agreement. The same principle applies to more complex or extreme legal circumstances.

Special Considerations
By contrast, "expressed authority" is clearly stated and granted by the principal to the agent either orally or in writing...and "apparent authority," sometimes called "ostensible authority," exists where a principal's actions could result in a third party (as a reasonable person) believing the agent had authority even where it may not be expressed or implied.

I couldn't find case Robinson V Mollele (1875)


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