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Law School Case Brief

Tedesco v. Gentry Dev., Inc. - 540 So. 2d 960 (La. 1989)

Rule:

Apparent authority is a doctrine by which an agent is empowered to bind his principal in a transaction with a third person when the principal has made a manifestation to the third person, or to the community of which the third person is a member, that the agent is authorized to engage in the particular transaction, although the principal has not actually delegated this authority to the agent.

Facts:

The principals, defendant Gentry Development Inc., purchased a tract of land containing several acres. Gentry subdivided the tract into several lots comprising the  asubdivision. Lots one and two, the latter being the property at issue in this litigation, faced a highway, and Gentry's directors intended to use those lots as a location for a branch bank. Without the Gentry's knowledge or approval, the president of the Gentry, Winford, signed a contract to sell lot two to plaintiff buyers, Ignatius Tedesco and others. When the principals, Gentry, declined to sell the property, alleging the president did not have authority to sell the land, the buyers sued for specific performance of the sales contract. Although the trial court held that the president was the principals' agent, the court of appeal held that he did not have authority to sell the property. The buyers challenged the decision.

Issue:

Was the doctrine of apparent authority applicable in the case at bar?

Answer:

No.

Conclusion:

The Court noted that even if the doctrine of apparent authority was applicable in cases involving real estate, the doctrine would not apply, because of the absence of the principals’ written authority enabling the president to sign the executory contract, thereby, rendering the contract unenforceable. The Court further noted that the buyers were not entitled to relief under the doctrine of agency by estoppel because there was no loss which would justify this court's reliance on equitable principles to make whole.

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