ICAEW BL · Chapter 6 · Question 7 of 10
Imran, claiming to act for Westcliff Ltd, signs a contract with a supplier. In fact he has no authority of any kind, and Westcliff Ltd refuses to ratify. What remedy does the supplier have?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It may sue Imran for breach of warranty of authority
Explanation
A person who claims to act as agent impliedly warrants that they have the authority claimed. If they do not, and the principal is not bound, the third party can sue the 'agent' for breach of warranty of authority (Collen v Wright). This is strict liability and does not depend on fraud. Westcliff Ltd is not bound because there was no actual or apparent authority and no ratification.
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