Actual authority and termination · Select one

Apply the rule

Corbett Cold Storage, Inc. operates a refrigerated warehouse in Reno. In May 2026 its president, Elena Vos, sent the facility manager, Sam Ortiz, a memo: "Get the loading dock roof replaced before the July heat. Budget is $45,000. Use whichever roofer you think is best." The memo said nothing about permits, equipment, or inspections. Sam hired a roofer for $41,000, paid a $1,200 municipal permit fee, and rented a crane for two days at $2,600 to lift materials to the roof, all in Corbett's name. Elena refused to pay the crane rental company, insisting that she had authorized only a roofing contract and that Sam should have called her first. The crane company sues Corbett.

Did Sam have actual authority to rent the crane on Corbett's behalf?

Choose one answer.

A. Yes, because authority to accomplish a task includes implied authority to do what is reasonably necessary to accomplish it, and Sam reasonably understood the memo to cover the steps needed to replace the roof.B. No, because actual authority extends only to acts the principal expressly named, and the memo mentioned only hiring a roofer.C. No, because implied authority arises only in an emergency when the agent cannot reach the principal for instructions.D. Yes, because the crane company reasonably believed that a facility manager could rent equipment for the warehouse.

Create a timed drill

Question ID: business-associations-mcq-c1-02 · Report an issue with this ID · Coverage and review status