Case study

kaustuv (Querist) 10 May 2012 This query is : Resolved
x entrusted his car to a mercantile agent for sale at a stated price not below that. the agent sold it to y below that price and misappropriated the proceeds. y resold the car to z. x came to the court and alledged that as ther car was sold below stated price hence it amounts to breach of contract and such valid title cannot be passed to y and in turn z would not be entitled to get valid title. your view

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Adv.R.P.Chugh (Expert) 11 May 2012
This is no place for academic queries, but in a nutshell - X is bound by the Sale because whether an agent's act is intra vires or not is governed by ostensible authority - here the mercantile agent had the ostensible authority to sell at any price and not some specific price...hence being within the authority - Y and then Z acquire a good title. The agent would be personally liable to Principal for breach of Contract. Read - S.188/237 - and don't ask academic questions in this section again use the forum.