The Principal’s Liability on the Contract
Crash agrees to have Steve represent him in various transactions as an agent to secure him performance contracts and endorsement deals.
Crash writes a letter to Bob that Steve is his agent. Unbeknownst to Bob, Crash specifically instructed Steve to only make endorsement deals with Bob. However, Steve signs a contract for Crash to attend a birthday party performance.
In all other cases, Steve has express authority to enter into any contract on behalf of Crash. So Steve makes a contract with Jimmy for a performance at a bar. Jimmy knows Steve is an agent, but he doesn’t know who Steve is an agent for.
Finally, Steve makes an endorsement contract with Fred.
Fred has no idea whether Steve is representing anyone.
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