Reference no: EM131736689

Farah is a sales representative for a Morton's Cleaning Supply Company. Farah is paid a commission on sales, and has authority to solicit offers from customers and to offer up to a 5% discount. She wears a jacket with Morton's Cleaning Supply Company logo on it when she makes sales calls, and carries order forms printed for Morton's Cleaning Supply Company. Farah is aware that Morton normally expects customers to pay within 30 days of delivery. Farah visits Fahad, a prospective customer. Fahad offers to place a very large order for cleaning supplies, provided that Farah gives him a 10% discount, and allows payment to be split into three installments. One third of the price is to be paid at the end of the month of delivery and for the next two months. Farah says that she has the authority to make such a contract. Fahad calls Morton and asks if Farah is authorized to make contracts giving a discount. No mention is made of the amount of the discount or payment in installments. Morton tells Fahad that Farah has the authority to offer discounts. Fahad signs an order form for the purchase of $10,000 (before discount) worth of cleaning supplies, and the goods are delivered two days later. A week later, Fahad receives an invoice from Morton for $9,500, due 30 days from the date of delivery. Fahad refuses to pay as he believes he owes only $9,000, and that it should be paid in three monthly installments of $3,000. Which interpretation of the contract, Morton's or Fahad's, would a court enforce? (Focus your analysis on agency authority.) Explain using the IRAC method as case analysis.

Please, focus on whether the agent had some form of express, implied, or apparent authority; or whether, in the absence of such authority, the principal ratified the transaction. Those are the 4 rules and applications, then draw a conclusion about Fahad's best course of action, e.g. which theory(ies) of agency law would more than likely be successful when pursuing a claim against Morton.