Reference no: EM131531041

To display desserts in restaurants, Mario Sclafani ordered refrigeration units from Felix Storch, Inc. Felix faxed a credit application to Sclafani. The application was faxed back with a signature that appeared to be Sclafani's. Felix delivered the units. When they were not paid for, Felix filed a suit against Sclafani to collect. Sclafani denied that he had seen the application or signed it. He testified that he referred to all credit questions to "the girl in the office." Who was the principal? Who was the agent? Who is liable on the contract? Explain.

Who is the principal?

Who is the agent?

Who is the third party?

Sclafani is _______ . Disclosed principal, partially disclosed,an undisclosed principal, the agent, the third party.

Principals _____ liable for contracts made by an agent when that contract was authorized by the principal. are or are not

When a third party, in this case Felix, enters into a contract with a disclosed principal, in this case Sclafani, who is liable on the contract? __________ on the contract. the agent alone, the principal alone, or both

Which types of authority are most likely at issue in this case? 1.___________ 2.__________ Express authority, implied authority, ratification

Generally, an agent's implied authority __________override an agent's express authority. Will or will not.

Felix alleged that Sclafani _________ the officer worker to sign and fax the credit application back to Felix. Did not authorized or authorized.

Felix likely alleged that in the event Sclafani did not give actual authority to the officer worker, the officer worker _______to contract with Felix. had apperant authority or did not have apperant authority

Apparent authority is established when the ______ leads a reasonably prudent person to justifiably believe that an agent has authority to act. principle or agent?

If the office worker had no authority to sign the credit agreement, could the office worker be held liable? Yes or No.

Is a court likely to find that Sclafani is liable under the contract? Yes or no.

What if Felix had knowledge that the officer worker did not have authority to sign the credit agreement on Sclafani's behalf? Yes or no.

Could Sclafani be held liable in this instance? Would the office worker be liable in this instance?

A. Likely Yes, because this was an act outside of the officer worker's scope of authority to act in this regard.

B. Likely No, because Felix had knowledge that the office worker did not have authority to act in this regard.