Legal Question in Business Law in Colorado
I'm a sole proprietor of a business and an employee signed a contract without my knowledge am I required to honor the contract ?
1 Answer from Attorneys
Good morning,
Under agency law a principal is generally bound by the acts of his agent carried out within the scope of the agent's authority and employment. You, as employer, are the principal. Moreover, a principal can be bound by unauthorized acts of the agent if they have ratified the unauthorized act.
Ultimately, the only way to know if this act by the agent--your employee--binds your business is to fully review the facts of this matter. If the act was unauthorized, one means to avoid obligation is to make an effective repudiation.
I would advise you contact an attorney shortly to determine this matter and to advise you on repudiation.
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