Best Plans Inc., employs many to help it run its sales departments, production, administration and more. Indeed, Eve, a Best Plans officer, is overwhelmed with the amount of delegation and reporting her new position requires. She works with Jim who is one of Best's sales staff. On one day, Eve tells Jim to sell a limited line of their "off-the-shelf" residential architectural plans to ABC Home Builders, Inc. However, Jim, who discloses he works for Best Plans, Inc., enters into a written contract with ABC to sell all of Best's residential plans. He sends the order out via email attachment (pdf files). Eve hears and demands that Jim stop the contract as he has exceeded his authority. The President of Best Plans, Frank, also learns about the fiasco and claims Eve was derelict in her work. He tells ABC that his company does not have to honor the ABC contract. 

(a) Is Jim personally liable under the ABC contract for the difference between the limited line and all of the line of plans? In other words, has he exceeded his authority in his "mistake"? Note that all parties understood that Jim was an agent of Best Plans Inc. Discuss Scope of Authority under Contract Liability for Principals 

(b) Is Best Plans Inc. liable to ABC under the contract? Discuss Scope of Authority under Contact Liability for Principals. You must quote from the textbook the relevant section(s) to support EACH of your answer(s).

Answer rating: 100% (QA)

a Jim may be personally liable under the ABC contract for exceeding his authority and selling all of Best Plans residential plans instead of the limit... View the full answer