Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on

Question

Olive, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision's behalf. Precision does not ratify the contract. Liability may be imposed on​

Quizplus · Accepted Answer

Olive acted beyond her authority by entering into the unauthorized contract. As a result, she may be held liable to Quality for misrepresenting her authority. Precision, on the other hand, cannot be held liable because it did not ratify the contract. Quality may also not be held liable because it entered into the contract in good faith, believing that Olive had the authority to act on Precision's behalf.

Olive, an Agent for Precision Paving Corporation, Enters into an Unauthorized