Doug Everett worked for Columbia Power as a consultant for businesses in reducing their power bills.Columbia terminated Doug and provided notice to all of his customers that Doug was no longer working with Columbia.A business that had heard about Doug from one of his former clients called Doug and asked him to help with reducing power bills of their offices and plants.Doug still had his materials from Columbia and negotiated a contract with the business for Columbia to provide certain equipment to the business and also for specific new rate plans for the business.Columbia did not know of the agreement and now refuses to honor it.Which of the following statements is correct?

Question

Doug Everett worked for Columbia Power as a consultant for businesses in reducing their power bills.Columbia terminated Doug and provided notice to all of his customers that Doug was no longer working with Columbia.A business that had heard about Doug from one of his former clients called Doug and asked him to help with reducing power bills of their offices and plants.Doug still had his materials from Columbia and negotiated a contract with the business for Columbia to provide certain equipment to the business and also for specific new rate plans for the business.Columbia did not know of the agreement and now refuses to honor it.Which of the following statements is correct?​

Quizplus · Accepted Answer

Columbia did not give general notice of termination to potential clients, so the business was not aware that Doug was no longer working with Columbia. Therefore, Columbia is still liable on the contract negotiated by Doug with the business. Option A is incorrect because even if Doug's actual authority had terminated, Columbia is still liable for contracts negotiated by former employees if it did not provide general notice of termination. Option B is incorrect because a former employee can negotiate contracts if they have the authority to do so and if their former employer did not provide general notice of termination. Option D is incorrect as Doug cannot be held solely liable in this case.

Doug Everett Worked for Columbia Power as a Consultant for Businesses