Free Will Steve And Leonore Be Held Liable To Juana Under The Contract To Purchase The House In Palm Springs? Essay Example

Business Law Homework #1

Is the sales agreement arranged by Maria with Tippy Textiles for the purchase of fabrics binding on Juana?
First, we determine whether the sales agreement arranged by Maria with Tippy Textiles for the purchase of fabrics is binding to Juana.
Earlier on, Juana granted Maria with the express authority as she took a step further to notify all firms that dealt with Cal Fashions regarding purchasing deals. Though Juana had the intentions of cutting off any links of Maria acting on her behalf, she failed to retain any written document to act as evidence. Cal Fashions partners were not aware if the powers vested on Maria had been withdrawn. After the personal misunderstanding, Maria ignored Juana sentiments because she knew that the letter that she had earlier sent to the business partners vested express authority unto her.
The letter sent by Juana to all firms acted as a legal document and evidence that any contract brought on board by Maria was legally binding. Tippy Textiles entered into an agreement with Cal Fashions because Juana had authorized any transactions made by Maria to be treated as legal and binding. Juana could have fired her sister Maria through a written document and also inform the business partners on the progress.
For this reason, there is a binding contract between Tippy textiles and Juana and it should be respected based on legal grounds.

Is there a binding contract between Juana and Chris for the sale of Cal Fashions products?

First, we decide whether Isabel has the express authority to enter into the contract with Chris. Second, did Isabel have the apparent authority to enter into a contract with Chris, even if, her principle has denied her the power to do so.
Express authority is considered as the power given to the agent in order to act on their behalf, approved by the agreement between the principal and the agent. An apparent authority arises when the third part rationally concludes that the agent had acquired power from principle due to the principal’s conduct.
Isabel had not applied express authority because Juana had not granted her any power to act on her behalf. In fact, Juana has clearly stated “you [Isabel] do NOT have authority to make any contracts on my behalf.” However, Isabel had applied the apparent authority. Juana conduct of agreeing the terms of Isabel and Chris grants Isabel power to enter into the contract with Chris. Since Juana approved the contract, the third party, Chris can be reasonably concluded that Juana had granted Isabel authority to enter into sales contract with him.

In conclusion, there is a binding contract between Juana and Chris for the sale of Cal Fashions products.

In this case, Steve had undisclosed his agent-principal relationship to the extent that Juana believed that he was acting on his account. As a result, if Steve has presented that he was acting as an agent to Leonore, only Leonore would be held liable as the principle for the breach of the contract. Steve and Leonore will be held liable for breaching the contract. Melinda, Juana’s agent, had come to an agreement with Steve that he was to buy the house in Palm Springs. Steve and Leonore did not honor the consideration requirement that expected them to make arrangements and compensate Juana before owning the house.
In conclusion, it was fraudulent for the involved parties to fail to remain bound to the agreement. Steve and Leonare had breached the contract, and the application of the law could have Juana compensated.