When I work with students on essay writing, as part of that program I provide students with my own answers to any essays I assign. I'm going to provide those answers here on the blog as well. Note that the questions will need to be purchased directly from the NCBE @ https://store.ncbex.org/mee-bar-exam-value-pack/. Included here are answers I've written to those previously administered essays.
February 2017: Agency
An initial matter is to determine who is liable to the chip manufacturer: the inventor, the woman, or both the inventor and the woman. For an agent to be liable to a principal for a contract entered into with a third party, the agent must have actual or apparent authority to enter into that contract. This is true regardless of whether the agent discloses to the third party that the agent is acting on behalf of a principal. Stated otherwise, even if the agent makes such a disclosure, the principal will not be liable absent actual or apparent authority on the part of the agent. Actual authority exists when the principal causes the agent to reasonably believe (either through spoken or written communication) that the principal desires the agent to act on the principal’s behalf. Apparent authority exists when the principal causes a third party to reasonably believe (again, through spoken or written communication) that the principal has agreed to have the agent act on the principal’s behalf. When an agent purports to act on behalf of a principal even though that agent has no authority to do so, any third party who suffers damages will recover from the agent alone.
Here, both actual and apparent authority are lacking. The facts do not provide any indication that the inventor (the principal, here) caused the woman (the agent, here) to reasonably believe that the inventor desired the woman to purchase these specific computer chips. To the contrary, the inventor told the woman to purchase series A chips, not series B chips. To be sure, actual authority would exist as to the purchase of series A chips, but it does not exist as to the series B chips that the woman purchased. And as to apparent authority, there is likewise nothing in the facts to indicate that the principal manifested to the chip manufacturer that the woman had been directed to act for the inventor. The woman disclosed to the chip manufacturer that she was acting on behalf of the inventor, but that alone will not suffice for apparent authority. Because the woman did manifest her authority to act on behalf of the inventor, she will be liable on that contract with the chip manufacturer on a theory of warranty. She purported to act on behalf of a principal even though she had neither actual nor apparent authority to do so.
Accordingly, the likely result here is that the woman alone will be liable to the chip manufacturer on the contract between the woman and the chip manufacturer. Because the woman had no actual or apparently authority to enter into that contract on behalf of the inventor, the inventor is unlikely to face liability.
Next to determine is who is liable to the blue-lens manufacturer: the inventor, the woman, or both the inventor and the woman. An undisclosed principal is a principal whose existence is not known to a third party. An agent who purports to act on his/her own behalf with a third party but in fact is acting with the actual authority of an undisclosed principal will be liable to third parties. In addition, the undisclosed principal will also be liable to third parties for any acts taken by the agent that the agent had the actual authority to perform.
Here, the woman had actual authority from the inventor to purchase blue lenses at a price not to exceed $300 per unit. The woman purchased the lenses for $295 per unit. Because she did so with the actual authority of the inventor, the inventor will be held liable on this contract between the woman and the blue-lens manufacturer. And this is true even though the inventor was undisclosed and not known to the third party. The woman is also liable because she purported to act on her own behalf with the blue-lens manufacturer even though she was acting with the actual authority of the inventor.
Thus, as to the contract for the blue-lenses, both the woman and the inventor will likely be held liable to the blue-lens manufacturer.
Last to determine is the extent of liability to the shutoff-switch manufacturer. When a third party contracts with a person and the third party knows that the person is acting with the authority to act for a principal, but the third party is unaware of the identity of the principal, that principal for whom the agent is acting is known as a partially disclosed principal. A partially disclosed principal will be held liable on contracts entered into with agents if those agents acted with actual or apparent authority on behalf of the partially disclosed principal. Even if the agent does not have actual or apparent authority to act on behalf of a partially disclosed principal, the principal might still be liable if the principal ratifies the acts of an agent. Ratification occurs if the principal’s conduct justifies a reasonable assumption that the principal consents to the act performed by the agent on the principal’s behalf. Ratification, however, doesn’t absolve the agent of liability. The agent might be liable since the agent warranted to the third party that the agent had the authority to act on behalf of the partially disclosed principal.
Here, the inventor would be deemed a partially disclosed principal since the woman told the shut-off switch manufacturer that she was acting on behalf of a principal, but she did not reveal the identity of the principal. The inventor accepted the shut-off switches and then used them in the production of the mowers. In doing so, it’s reasonable to think that the inventor consented to the woman entering into this contract with the shut-off manufacturer and as such the inventor ratified that contract between the woman and the shutoff-switch manufacturer. The inventor will be liable, but that will not prevent liability as well on the part of the woman since the woman did warrant to the shut-off switch manufacturer that she had the authority to act on behalf of the inventor.
As such, it is probable that both the woman and inventor will be held liable to the shutoff-switch manufacturer.
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