Question

In: Accounting

3 ID Limited (ID) has recently been incorporated as a private limited company and carries on...

3 ID Limited (ID) has recently been incorporated as a private limited company and carries on fashion business. Donald is very experienced in this field and is employed by ID as an agent to purchase fashion clothes. Recently Donald has signed a contract with E Bop Limited (E Bop) for purchase of jewelry which has not been previously authorized by the company.
Advise the legal position of ID, in particular the rights and liabilities it may have under the contract with E Bop.
no handwriting

Solutions

Expert Solution

Principal is liable for the actions of his agent under actual authority as well as under implied ie apparent authority.

In the given case Donald was appointed by ID Ltd. Meaning, he is contractually an agent for purchasing fashion clothes. This is a the expressed or actual authority. However Donald entered into contract with Ebop for supplying jewellery and not garments. Hence Ebop being a third party believed Donald as an agent was authorized to procure the same and understandably can sue ID Ltd who is responsible for Donald's actions for breach of contract, had they refused to accept the order made for the said jewellery.

Donald on the other hand may defend his actions on grounds of apprentice authority.

Considering all the ground facts, since it clearly mentions in the question that the purchase of jewelry wasn't previously authorized, the contract is not legally binding in the hands of ID Ltd. Thus there is no apparent authority on Donald to procure any jewellery. Hence the contract is void. Moreover ID Lts has the the right to sue Donald for breach of duty.

ekkarill92 answered 10 months ago
Next > < Previous

Related Solutions

3      ID Limited (ID) has recently been incorporated as a private limited company and carries on fashion...
3      ID Limited (ID) has recently been incorporated as a private limited company and carries on fashion business.  Donald is very experienced in this field and is employed by ID as an agent to purchase fashion clothes. Recently Donald has signed a contract with E Bop Limited (E Bop) for purchase of jewelry which has not been previously authorized by the company. Advise the legal position of ID, in particular the rights and liabilities it may have under the contract with E...
4)La Rosh Ltd was incorporated in 2015 as a private limited company. During 2019, the company...
4)La Rosh Ltd was incorporated in 2015 as a private limited company. During 2019, the company faced serious financial problems due to a decline in demand and creditors have put a claim against the company leading it into administration. The bank has forfeit all of the company’s assets and the unsecured creditors are asking for legal advice in suing the shareholders for damages. Required: By reference to a relevant case, discuss whether the company’s creditors could claim payment from the...
The Nanjo Van(NV) Sdn Bhd is a private limited company incorporated in Malaysia. Starting its business...
The Nanjo Van(NV) Sdn Bhd is a private limited company incorporated in Malaysia. Starting its business in the last 5 years, NV already employs 70 dispatch staffs for delivery services. The company currently owns 15 vans and 20 motorcycles, some were purchased new, and some were acquired second-hand. Since the pandemic of Covid-19 early 2020, the company suffers from inadequate resources as many trading companies now need transport facilities to sell their products. The company then decides to lease 10...
Historically, the exercise of eminent domain has been limited to the taking of private lands for...
Historically, the exercise of eminent domain has been limited to the taking of private lands for public works projects---roads, schools, water treatment projects, etc. Within the past couple of years in the Northeast, a city took (via its power of eminent domain) private land to be used for private commercial purposes as a means to increase the municipality's tax base (i.e., taking family homes for the construction of a Wal-Mart, although this was not exactly the case in this instance)....
Operations Strategy at Woodbest Limited Until recently, Woodbest Limited has been the leading producer of wood...
Operations Strategy at Woodbest Limited Until recently, Woodbest Limited has been the leading producer of wood furniture in Malona city. Following the arrival of a major competitor in the city, Woodbest is seeking to explore innovative ways of maintaining its position in the market. In the meantime, it is relying on its competencies in the acquisition of materials, production, transportation of finished products and installations. The perfect coordination of these activities and its five-year maintenance-free policy for customers have so...
Chui-Kee Limited (CK) is a limited liability company incorporated in Hong Kong. CK has a chain...
Chui-Kee Limited (CK) is a limited liability company incorporated in Hong Kong. CK has a chain of Chinese restaurants specialised in seafood dishes. It operates eight restaurants, and they are located in popular shopping districts, like Central, Causeway Bay, Mongkok and Tsim Sha Tsui. CK is famous for its spicy seafood cuisine, and its restaurants are popular among tourists and local citizens. You are the Audit Manager of Moon CPA Limited (Moon). You are responsible for the financial statements audit...
California Incorporated (CI) is a private company that has historically reported its results in accordance with...
California Incorporated (CI) is a private company that has historically reported its results in accordance with ASPE. To fund its significant growth, the company issued common shares to another investor. In conducting its due diligence on the company before buying the shares, the new investor closely reviewed CI’s financial records. The three issues identified are listed below: 1. Long-term contracts: CI accounts for revenue from long-term contracts using the completed contract method, as all contracts are completed in two years...
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in...
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in the fast moving consumer goods industry. The shareholders of the company at their Annual General Meeting approved an ambitious major expansion project that will enable the company to gain market share. You as the CFO has been tasked with preparing a report for the company’s board of directors clearly evaluating the available financing options
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in...
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in the fast moving consumer goods industry. The shareholders of the company at their Annual General Meeting approved an ambitious major expansion project that will enable the company to gain market share. You as the CFO has been tasked with preparing a report for the company’s board of directors clearly evaluating the available financing options.
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in...
You have recently been appointed the Chief Financial Officer of Big Dreams Limited, a company in the fast moving consumer goods industry. The shareholders of the company at their Annual General Meeting approved an ambitious major expansion project that will enable the company to gain market share. You as the CFO has been tasked with preparing a report for the company’s board of directors clearly evaluating the available financing options.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT