Part 8- Agency Law, Chapter 36: Third-Party Relations of the Principal and the Agent, Doc 2 | Indiana University Bloomington - Edubirdie

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Indiana University Bloomington
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Financial and Managerial Accounting: Information for Decisions - John J. Wild
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2024
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463

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1
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bratrochanter

In Opp v. Wheaton Van Lines, Inc., the Seventh Circuit Court evaluated whether Mr. Opp, acting on behalf of his former spouse Ms. Opp, had the authority to limit liability for moving damages by signing a bill of lading without her explicit authorization. The decision hinged on distinguishing between express, implied, and apparent authority under agency law. Key Takeaways from the Case: 1. Express Authority: The court found no evidence that Ms. Opp gave Mr. Opp express authority to sign the bill of lading. Ms. Opp had only instructed him to open the door and provide access to her belongings, not to negotiate terms or limit liability. 2. Implied Authority: Implied authority exists when an agent’s role reasonably necessitates certain actions beyond those expressly granted. The court concluded that Mr. Opp’s implied authority was limited to granting access, not modifying terms, especially since Ms. Opp had not informed him of any such requirements. 3. Apparent Authority: Apparent authority relies on a principal’s behavior or statements that could reasonably lead a third party to believe the agent has certain powers. Here, factors such as Ms. Opp’s prior communications with Soraghan, her explicit valuation request, and the lack of a named representative on official forms indicated that Mr. Opp did not have apparent authority to limit liability. Outcome and Broader Implications: The court ruled in Ms. Opp's favor, reversing summary judgment and remanding the case, as there was insufficient basis to conclude Mr. Opp had the authority— whether express, implied, or apparent—to bind her to liability limitations. This case illustrates that a third party cannot assume authority based solely on an agent’s presence or minimal actions; explicit or implied principal instructions are required to validate an agent’s broader decision-making capacity.

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