Legal Question in Business Law in Massachusetts

Consider whether the following contract made by X would be enforceable against X or Y and why: X, who had been Y company's purchasing agent for some time, was fired when Y discovered that he was stealing. Upon getting his notice, X bought goods from ABC Inc on the company account and paid for them with a Y company check- which Y later stopped payment on. ABC company sues X and Y for payment on the goods contract


Asked on 12/19/11, 2:34 pm

1 Answer from Attorneys
Jason Lau

I could see Y possibly being liable with a possible right of indemnification from X. X was Y's purchasing agent with the power to enter contracts with suppliers. That power was presumably taken away from Y once Y sent X the notice of termination.

However, the hiccup I see here involves a good faith supplier. ABC, in good faith, contracted with X for the benefit of Y. ABC believed that X was the representative of Y. The contract was made between ABC and Y using Y's check. Therefore, it looks like Y could be held liable to ABC. Y looks like it has a claim against X for falsely representing it was an employee of Y, and may try and seek indemnification.

Jason

http://jlaufirm.com

http://jasonlauip.blogspot.com

This is not considered legal advice. A more thorough understanding of the facts must be given. The answer was based on assumptions. This does not create an attorney-client relationship.

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Answered on 12/20/11, 8:53 pm


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