Question

North Inc. hired Sutter as a purchasing agent. North gave Sutter written authorization to purchase, without limit, electronic appliances. Later, Sutter was told not to purchase more than 300 of each appliance. Sutter contracted with Orr Corp. to purchase 500 digital recorders. Orr had been shown Sutter's written authorization. What statements is correct?

Answer 1

Orr Corp. can rely on Sutter's written authorization to purchase the 500 digital recorders, even though Sutter was later told not to purchase more than 300 of each appliance.

Step-by-step explanation:

The correct statement is that Orr Corp. can rely on Sutter's written authorization to purchase the 500 digital recorders, even though Sutter was later told not to purchase more than 300 of each appliance.

This is because North Inc. gave Sutter written authorization without limit initially, and Orr Corp. had seen this authorization. Therefore, it can be assumed that Sutter had the authority to purchase the 500 digital recorders.

However, Sutter may face consequences or disciplinary action from North Inc. for exceeding the limit set later.