Dealership and employs several sales persons

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Butch owns a used car dealership and employs several sales persons who assist him in selling cars. Butch recently ran a series oftelevision ads stating that he and his sales force“will not be undersold”.

At a recent monthly meeting, Butch informed hisstaff that they were authorized to sell any car on the lot for any amount as long as theprice was not reduced by more than 20 percent of the sticker price. Butch expressly reserved tohimself the authority to sell a car for less than that amount.

Toward the end of the month, one of the salesmenhad a lagging sales record and feared that Butch might fire him. When Robinstopped in to look for a car, the salesman persuaded her to seal the deal by agreeing toreduce the cost to 30 percent below the sticker price.

Butch immediately contacted Robin and informed herthat the salesman had no authority to sell the car for that amount. He demanded thatRobin either pay an additional 10 percent or return the car.

(a) What result if Robin argues that the salesmanhad actual authority to sell the car to her for 30 percent below the stickerprice? Explainfully.

(b) What result if Robin argues that the salesmanhad apparent authority to sell the car to her for 30 percent below the stickerprice? Explainfully.

(c) What legal duty to Butch has been breached bythe salesman? What result? Explain fully.

Reference no: EM13331554

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