Question

Kamitra Smith was a catering specialist for TLC Catering, a food service business. TLC’s catering specialists were authorized to make catering contracts with customers and to serve food in compliance with those contacts. On behalf of TLC, Smith made a contract with Miller Clandon and Associates, a law firm, to cater a holiday party in Miller Clandon’s office. Smith signed a contract that was drafted by Miller Clandon. The contract provided that TLC would be liable for all damages suffered by Miller Clandon and its staff in connection with TLC’s performance of the contract. Smith and three other TLC employees catered the Miller Clandon party for TLC. One of Miller Clandon’s staff attorney s=slipped on coffee spilled by a TCL employee during the cartered party. The attorney sued TLC, aruging that TLC was bound by the contact signed by Smith. Did Smith have expressed, implied, or apparent authority to sign the contact that imposed liability on TLC?

Please explain your reasoning for each one and why you got that answer.

Answer 1

Expressed authority exists when a principal and agent enter into a formal relationship to form an express agency. The duties and rights of both the principal and agent are spelled out in clear terms and are often put in written terms.

Implied authority exists when the agency relationship is created by the conduct of the principle and agent and the conduct of both the parties gives deemed authority to the agent.

Apparent authority exists from the perspective of a third party. Apparent authority is assumed to exists by a third party and the third party has to reasonably assume, given the circumstances, that the agent has authority on behalf of the principal.

In this case Kamitra Smith had expressed authority. This is because, as a catering specialist, Smith was authorized to make catering contracts with different customers of TLC. TLC, being a principal, in this case, is liable for all contracts entered into by catering specialists on their behalf.