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The Principal’s Liability on the
Contract

Crash agrees to have Steve
represent him in various transactions as an agent to secure him performance
contracts and endorsement deals.

Crash writes a letter to Bob that
Steve is his agent. Unbeknownst to Bob, Crash specifically instructed Steve to
only make endorsement deals with Bob. However, Steve signs a contract for Crash
to attend a birthday party performance.

In all other cases, Steve has
express authority to enter into any contract on behalf of Crash. So Steven
makes a contract with Jimmy for a performance at a bar. Jimmy knows Steven is
an agent, but he doesn’t not know who Steve is an agent for.

Finally, Steven makes an
endorsement contract with Freddy. Fred has no idea whether Steve is
representing anyone. Is Crash liable for any of these contracts? Is Steve
liable for any of these contracts?

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