INSTRUCTION: Answer the question using IRAC Method $($Issues$,$ Rule, Application, and Conclusion$)$

$27.$ Carl sold certain goods to Ted & Co$.$ through Vic who was Ted's chief clerk. Carl had transacted business with Ted & Co$.$ for $10$ years. Typically, Carl would contact Ted & Co$.$ and ask for the chief clerk. Vic always answered the call.

Recently, Vic called Carl and told him Ted & Co was about to expand company operations and needed more goods for its inventory. He said he expected that Carl would regularly receive larger orders from Ted & Co$.,$ and in fact, Vic placed a large order, larger than was usually transacted over recent years. Little was said regarding the method of delivery and payment. The goods were shipped, delivered, inspected, and accepted by Ted$$s receiving department and placed into their inventory.

One week after the goods were delivered, Vic placed another order on behalf of Ted & Co$.$ He requested that this order be delivered to Rick$$s warehouse to be held for Ted & Co$.$ The order was delivered but was not signed for by Ted & Co$.$s receiving department. Vic and Rick then sold these goods to Sean who did not know the goods were illegally acquired.

Twenty$-$nine days later, the CEO of Ted & Co was contacted by her accounting department to verify payment of the recent deliveries. Normally the account would have been routinely paid, but these orders were extraordinarily large, and the comptroller believed confirmation was in order.

When she found out that Vic was responsible for the large orders, Ted & Co$.$s CEO was infuriated, and immediately fired him. She then had the comptroller cancel the orders placed by Vic and refused to pay Carl. Carl responded by asking for full payment for both orders.

QUESTION:

Discuss the potential liability of the parties.

ANSWER