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Does breach of warranty of authority apply only to ostensible authority or even to actual authority?
Probably both – how can the innocent third party know what is the extent of an agent’s authority / what limits are imposed by the principal on the agent’s allowable actions
Follow up Question
Does the case law of Watteau v Fenwick 1893 qualify for breach of warranty of authority?
Main points of the case
The owner of the hotel (F) employed the previous owner (H) to manage it.
F forbade H to buy cigars on credit
H bought cigars from W on credit.
W sued F for payment
W believed H still owned the hotelDecision
It was within the usual authority of a manager of a hotel to buy cigars on credit and F was bound by the contract since his restriction of usual authority had not been communicatedWell, yes. The cigar salesman is able to sue F because buying cigars is within the realms of apparent / ostensible authority of a bar manager.
But F can now sue H and expect H to have to pay for any loss suffered by F as a result of H’s breach of warranty of authority
Ok?
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