The Principalâ€™s Liability on the Contract
Crash agrees to have Steve represent him in various transactions as an agent to secure him performance contracts and endorsement deals.
Crash writes a letter to Bob that Steve is his agent. Unbeknownst to Bob, Crash specifically instructed Steve to only make endorsement deals with Bob. However, Steve signs a contract for Crash to attend a birthday party performance.
In all other cases, Steve has express authority to enter into any contract on behalf of Crash. So Steven makes a contract with Jimmy for a performance at a bar. Jimmy knows Steven is an agent, but he doesnâ€™t not know who Steve is an agent for.
Finally, Steven makes an endorsement contract with Freddy. Fred has no idea whether Steve is representing anyone. Is Crash liable for any of these contracts? Is Steve liable for any of these contracts?