Legal Question in Business Law in Virginia

Re: Who Owns The Contract

This sort of situation comes up more often than one might think.

Every business works through its employees or officers. So a supplier can only deal with a business through that business' employees.

If the employee who made the request appeared to have the authority to make the request on behalf of the company, then the supplier would believe that the employee was speaking for the company. This is called 'apparent authority.'

You say that there is no contract other than the written request by the employee. It might be important if that written request looks like the employee has authority. For example, was it written on company letterhead or was it scrawled on a blank piece of paper? If the supplier had reason to ask questions, then they might not be able to claim that the employee had "apparent authority."

But very likely the contract is valid and binding between the company and the supplier.

Now, who ultimately pays is a different question. If the person did not have the authority to make the request, the company might have a complaint with that person, between the two of them, and might be able to make the person pay for the purchase.

However, on that question, it might also be important what kind of supplies they were. If they were the type of supplies that the company routinely used, the company might have a hard time winning on that one. If the company wanted to buy one kind instead of another kind, it might be a reasonable action by the employee believing that he or she was getting the supplies necessary for the company. I think the company would have to show that the purchase was of something TOTALLY unneeded by the company (I mean completely outside of what they normally buy). Otherwise, if teh employee reasonably believed that this is the kind of thing that the company routinely buys, needs, and uses, it would only look like an error of judgment, but a reasonable decision to make.