Three-Seventy Leasing Corporation v. Ampex Corporation
528 F.2d 993 (5th Cir.1976).

Facts:
Kays, an Ampex sales rep, agreed to sell equipment to 370. 370 signed the agreement, but Ampex never did (the rep just confirmed the delivery info). When 370 sued to enforce the contract, Ampex tried to argue that the forms were only solicitation and Kays didn’t have the actual authority to approve sales.

History:
The district court found that there was an enforceable contract, but didn’t get into specifics.

Issue:
Did Kays have the apparent authority to act on behalf of Ampex?

Holding:
Yes.

Reasoning:
“An agent has apparent authority sufficient to bind the principal when the principal acts in a manner as would lead a reasonably prudent person to suppose that the agent had the authority he purports to exercise.”

  • Here, Kays was employed as a salesman. It’s therefore reasonable that he would have the type of authority to bind his employer to sell.
  • Also, Kays superior issued an in-office memo regarding the purchase, and directed it to go through Kays.