Agency: Outside Sales Agent

Important Facts & Issues

• JoeCo. is utilizing WiscoSales to sell computers to customers in western Wisconsin

• WiscoSales is a manufacturers rep firm that has other clients and solicits sales in Wisconsin

• Agreement was that WiscoSales was to only solicit orders for 10 computers or $2500. A greater amount would require pre-approval from JoeCo.

• Within 2 weeks, WiscoSales sends an order for 141 computers from DairyCo at a higher price per unit but delivery within 10 days

• JoeCo. requests that WiscoSales contact DairyCo to cancel the order but WiscoSales refuses due to the work put into this account

• JoeCo contacts DairyCo to inform them the order will not be fulfilled. DairyCo demands performance due to the additional space and resources staffed to work the additional project

• DairyCo informs JoeCo that they were aware that WiscoSales was a sales firm but did not know who they worked for.

Questions Posed

1. Does WiscoSales work for JoeCo?

2. What are JoeCo's legal rights and obligations in this situation?

3. What are WiscoSales' obligations here?

4. What do you recommend JoeCo do?

Possible Answers to Above Questions

1. WiscoSales is an agent of JoeCo who has express authority as JoeCo has requested WiscoSales to solicit sales on behalf of JoeCo. This is also a category of actual authority because the agent is authorized to act for the principal. (pg 689)

2. A principal is bound by acts of an agent by one of the three topics listed below (pg 689):

o The agent has authority

o The principal, for reasons of fairness, is estopped from denying the agent had authority

o The principal ratifies the acts of the agent

JoeCo is bound by acts