Theodore,as treasurer of Valleyview Corporation,had the duty to invest corporate earnings as he deemed best for the company.When Valleyview Corporation went public,the new board decided that a committee of the officers would make such investment decisions.If Theodore thereafter unilaterally contracted to purchase investment securities with corporate earnings as he had done many times before,such contract would be valid:
A) since Theodore would have express authority.
B) since Theodore had implied authority.
C) under apparent authority if the seller knew of Theodore's past transactions.
D) because of ratification if the board did not know of his actions.

Question

Quizplus · Accepted Answer

Theodore's unilateral actions could be considered valid under apparent authority if the seller was aware of his past transactions and believed Theodore still had the authority to make such investments on behalf of the corporation. Express and implied authority are not applicable here because the new board's decision to have a committee make investment decisions overrides Theodore's previous authority. Ratification without the board's knowledge does not validate the contract in this context.

Theodore,as Treasurer of Valleyview Corporation,had the Duty to Invest Corporate