Arthur, who works for Peter, sees what he thinks is a good deal for Peter. Without asking whether he has authority to negotiate the deal, Arthur enters into a contract on Peter's behalf. Peter says later that he isn't interested. Is Peter liable on the contract? Is Arthur liable on the contract? Explain
If Arthur has express, implied, or apparent authority, Peter would be liable on the contract. If the third party has not changed position at the time that Peter repudiates the contract, Peter may be able to minimize any damage claim. If the contract is within the scope of his authority, and Peter is a disclosed principal, Arthur is not liable unless he personally guaranteed Peter's performance. The reason is that an agent is not personally intended as a party to a contract. If the contract is outside his scope of authority, Arthur has breached the warranty of authority and is liable.
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