Question

Ralph, the owner of a medium-sized business operated as a sole proprietorship, gives his vice-president, Wanda, authority to hire a new manager for the firm. Ralph gives Wanda detailed instructions about the salary she can contract to pay, but tells her that under no circumstances can she make commitments regarding the new manager's pension. Wanda contracts to hire Nick for the new managerial position. But to get Nick to sign up, she has to make certain specific pension commitments to him. Some years later, Nick sues Ralph for failing to fulfill the pension commitments. Which of the following is true in this case?

a. Ralph has no liability, because he expressly told Wanda that she didn't have authority to bind him on pension matters.
b. Ralph is bound on the basis of Wanda's apparent authority.
c. Ralph is bound on the basis of Wanda's implied authority.
d. Ralph is bound on the basis of Wanda's actual authority.

Answer 1

b. Ralph is bound on the basis of Wanda's apparent authority.

Step-by-step explanation:

Since in the question it is mentioned that wanda to hire nick for the managerial question but for that she wants to do certain pension commitments

Now After some years, nick sues ralph for the fulfill the pension commitments so here the ralph would be founded based on the authority of Wanda

So the option b is correct

And, the rest of the options would be incorrect