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Law School Case Brief

Universal Comput. Sys., Inc. v. Med. Servs. Ass'n - 628 F.2d 820 (3d Cir. 1980)

Rule:

The test for determining whether an agent possesses apparent authority is whether a man of ordinary prudence, diligence and discretion would have a right to believe and would actually believe that the agent possessed the authority he purported to exercise.

Facts:

Plaintiff Universal filed a complaint against Defendant for damages based on the alleged breach of promise. This arose after Defendant solicited bids for the lease of a computer and Plaintiff prepared a bid proposal subject to the terms of solicitation that it be received at a certain date and time. Defendant’s employee assured the Plaintiff that the proposal would be picked up at the airport and delivered to the Defendant in time to meet the bidding deadline. The bid proposal did not arrive on time, and Defendant rejected the bid as untimely and returned it unopened. The case was tried before a jury, which returned a verdict against Defendant. The district court granted Defendant's motion for judgment non obstante veredicto.

Issue:

Is the plaintiff entitled to rely on a promise made by the defendant’s agent under the principle of promissory estoppel?

Answer:

Yes.

Conclusion:

The Court held that Plaintiff was entitled to rely on a promise made by Defendant's agent under the principle of promissory estoppel and that the jury's verdict awarding damages should be reinstated. It was clear that Plaintiff incurred a substantial detriment as a result of relying upon Defendant's promise. Plaintiff suffered an injustice in being deprived of the service promised by Defendant’s employee. The jury could reasonably have found that Defendant’s employee possessed apparent authority to make a promise binding upon Defendant and that Plaintiff relied upon that promise to its detriment. Thus, the promise should be enforced on the basis of promissory estoppel.

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