An agent contracted with a third party on behalf of a principal, but went beyond both his actual and apparent authority. The third party was never paid. Which of the following indicates the legal position of the third party?
A) He can successfully sue the principal because the principal is always liable for the actions of his agent.
B) He can successfully sue the agent for breach of warranty of authority if the principal fails to ratify the contract.
C) Since the agent had no authority, the third party has no remedy against anyone.
D) The third party can ratify the deal and force the principal to go through with it.
E) He can sue the agent for the tort of nuisance.

Question

Quizplus · Accepted Answer

The third party can sue the agent for breach of warranty of authority if the agent acted beyond their actual and apparent authority and the principal does not ratify the contract. This is because the agent impliedly warrants that they have the authority to enter into the contract on behalf of the principal.

An Agent Contracted with a Third Party on Behalf of a Principal