Question

Pat bought a cotton sweater at Ivey's Fashion Store. Sue, the salesperson, told her the sweater was guaranteed not to shrink if washed in cold water by hand. Pat washes the sweater as directed, and it shrinks. Which of the following is correct?
a. Pat has no recourse against the store, because it was only the salesclerk who misrepresented the sweater.
b. Sue has apparent authority to make warranties such as the one that she made. Therefore, the store is bound.
c. If Sue is only a part-time employee, Ivey has no responsibility for misrepresentations she makes.
d. Salesclerks are usually independent contractors. Thus, there is no liability on the part of Ivey.

Answer 1

Answer:

B) Sue has apparent authority to make warranties such as the one that she made. Therefore, the store is bound.

Explanation:

Apparent authority refers to a situation where a third party (in this case Pat, the customer) can reasonable assume that an agent (Sue, the salesperson) has been given authority to decide or act in favor a of  principal (Ivey's Fashion Store). Since Sue works for Ivey's, it was reasonable for Pat to believe that Sue had the authority to make express warranties.