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Smith v. Hansen, Hansen & Johnson - 63 Wash. App. 355, 818 P.2d 1127 (1991)

Rule:

Both actual and apparent authority depend upon objective manifestations. The objective manifestations must be those of the principal. With actual authority, the principal's objective manifestations are made to the agent; with apparent authority, they are made to a third person. An agent's exercise of either type of authority results in the principal's being bound.

Facts:

The owner of a building hired Hansen, Hansen & Johnson, Inc. (HH&J) to renovate the building. The renovation included design and construction of an exterior glass wall. A year or so after the new wall was finished, it began to leak. The owner of the building sought redress from HH&J, which settled with the owner for $81,000. HH&J then sued Fentron, a corporation in the business of designing and installing glass walls. Fentron had employed Everett Foster as a "manager of manufacturing services," who actually liasoned with HH&J in the design and construction of the glass wall. HH&J sought reimbursement plus other damages. The trial court awarded damages.

Issue:

Was there sufficient evidence to show that Foster have the apparent authority to sell materials or designs on Fentron's behalf?

Answer:

No

Conclusion:

 On review, the court found the evidence was insufficient to support a reasonable inference that Foster had the apparent authority to sell materials or designs on Fentron's behalf, nor was it sufficient to support a reasonable inference that the designer had apparent authority to sell materials or designs because Fentron made no objective manifestations that either individual had any such authority. The court observed that Foster’s request to be paid personally, and that the glass was at a salvage yard and not in control of Fentron, should have put the contractor on notice to make a further inquiry with Fentron. The court found that Fentron did not ratify Foster’s conduct by demanding payment from HH&J for materials it had supplied, by expressing an interest in continuing business relationship on another project, or by offering to assist HH&J in pursuing criminal action against Foster because none of these actions suggested approval or affirmance of his activities.

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