Anna hired Juan to act as her sales agent in her auto dealership.However,Anna has instructed Juan not to enter into any sales contracts before she has had a chance to review the transaction.However,one day Juan entered into a sales contract with William,without informing Anna first.Has Juan created a contract with William that is binding on Anna in this situation?

Question

Quizplus · Accepted Answer

Apparent authority protects third parties who reasonably rely on a principal's manifestations that an agent has authority.It assumes special importance in cases where the principal has told the agent not to make certain contracts that the agent ordinarily would have actual authority to make,but the third party knows nothing about this limitation and has no reason to know about it.

Anna Hired Juan to Act as Her Sales Agent in Her