Legal Question in Business Law in New York

The president of a Corp. authorized a manager to make contract (contract to purchase goods necessary to carry out its business) and the manager makes contract. then the goods are delivered but the Corp. do not pay for the goods.

In this case under what theory can I sue the Corp.? apparent authority? or implied authority?

and who's the principal of the manager? Corp.(since president authorized him to make K and president is agent of Corp.)? or President(since it is president that authorized him to make K)?

at first I thought I can sue the Corp. under apparent authority but I doubt that there is no appearance of authority created by Corp.'s manifestation.

Then I began to think that the manager had express authority to make contract as president expressly authorized the manager to make K.

then I got confused and I have know idea at all.

I really appreciate you for your advice, in advance/


Asked on 6/04/11, 4:55 am

1 Answer from Attorneys

Michael Haber Law Offices of Michael S. Haber

If a corporate manager contracted in the corporate name for goods that were in fact delivered to the corporation, and the corporation retained those goods, you don't have to worry about agency issues (at least not right now). Whether the manager had actual authority (which he did, because he was authorized by the president of the corporation) or apparent authority is not an issue unless and until the corporation maintains that the manager acted without authority. The fact that the corporation retained the goods that its manager contracted for should be the beginning, the middle, and the end of the story.

It sometimes happen that any of us (whether individuals or business entities) receive goods that we have not asked for, not contracted for, and did not even want. In such an instance, we pick up the phone and say, "Hey, I received a delivery that I never ordered." The corporation in question did not do that.

The theory that you would be suing for is breach of contract. The corporation, acting through its manager, entered into a contract. The contract presumably was in writing, since the Uniform Commercial Code requires that there be a writing evincing the purchase of a sale of goods valued at $500 or more. The manager presumably signed this contract on behalf of the corporation. The goods were delivered pursuant to that contract. The goods were accepted by the corporation. The goods were retained and presumably the goods were the kind that would be ordinarily purchased by the corporation in the regular course of business. The goods were not paid for. This constitutes breach of contract.

I think it would be prudent to hire an attorney. An attorney will properly draft the complaint. Based on the facts that you've posted (and the facts that I've inferred), it sounds as though there would be little defense for the corporation. Cases such as those are typically (but not always) resolved promptly.

If you need any help, you can feel free to contact me.

Good luck to you.

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Answered on 6/05/11, 11:17 am


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