Theodore, as treasurer of Komand Corporation, had the duty to invest corporate earnings as he deemed best for the company.When Komand 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:

Question

Quizplus · Accepted Answer

Theodore's unilateral actions could be seen as 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. This is because apparent authority is based on the perceptions of a third party (the seller, in this case) regarding an individual's authority to act on behalf of an organization.

Theodore, as Treasurer of Komand Corporation, Had the Duty to Invest