Question

Donald is an agent representing Xmart, a large department store chain. Xmart has sent him to deal with Fred in regard to purchasing Fred's land in order to erect a new store. When Donald first meets Fred, Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on Xmart's behalf. Xmart sends Fred a written confirmation of Donald's authorization to act as its agent and states that a contract signed by Donald will be honored by Xmart. Donald and Fred meet every other day during the negotiations. While the negotiations are still ongoing, Donald is fired by Xmart because it doesn't feel that he is making sufficient progress. Why is it important for Xmart to communicate with Fred regarding Donald's firing

Answer 1

Answer:

If Xmart doesn't notify Fred that Donald is not there agent anymore, then any agreement made between Donald and Fred will be valid and binding to Xmart.

Donald is no longer Xmart's agent, but unless Fred is notified, he still may act as an apparent agent. Apparent agents are people that someone could assume are acting on behalf of a principal, e.g. a person that wears a store's uniform inside a store is presumably a salesperson or someone that works for the store, therefore, he/she is an apparent agent. You do not ask for employment contracts when you enter a store.