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Essay / MC Electric Case Study - 1362
Facts that suggest Dortmund had apparent authority are Dortmund's role as "sales manager" and "sales promoter". Both titles could give GB the impression that Dortmund had authority. Additionally, GB could argue that entering into deals like these are within the usual authority of someone in Dortmund's position using examples in similar organizations, but more information would be needed to determine whether or not this is the norm. Finally, it should be noted that “a principal will only be bound by contracts under the apparent authority of the agent if the third party has relied on that appearance of authority” (McInnes et al. 520 ). It seems likely that GB relied on Dortmund's appearance of authority, but MC Electric could still make some arguments. Firstly, it is not stated that GB ever spoke to the director and that his reliance on apparent authority would therefore have been based solely on Dortmund's role within the company. By the way Dortmund spoke, acted or presented himself, he could have given GB a strong, but inaccurate, representation of his authority. GB may also have counted on Dortmund's official designation as "sales director". This role may indicate apparent authority as it is in charge of “business strategy”. Nevertheless, Dortmund's role indicates that he is officially responsible