Bob, owner of a small business, goes to Sally to negotiate the purchase of some inventory. Bob
has Paul with him, who he introduces to Sally as "Paul, my purchasing manager".
A short while
later, Bob says he must leave and says, "You two can conclude this deal." Paul signs a contract to
buy 2,500 units of her product. Paul tells Bob, and Bob then says, "You know you weren't
supposed to buy more than 1,000 units!" Assume that Bob, in fact, had instructed Paul, prior to
meeting with Sally, to not buy more than 1,000 units. Can Sally hold Bob to the contract?
A) Yes, because there was apparent authority for the transaction.
B) Yes, because there was implied authority for the transaction.
C) No, but she can hold him to a purchase of 1,000 units.
D) No, because Paul did not have authority to buy 2,500 units.
A
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Indicate whether the statement is true or false