Question

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 the law.

Answer 1

As per the doctrine of respondeat superior, a principal is responsible for the act performed by the agent if it is done on the basis of terms and conditions as well as authority (in any form) given to the agent. In this case, Peter will be liable to the contract if that authority to enter the contract is given to the Arthur.
Here, the action taken up by Arthur should not fall under the category of intentional tort unless it is ordered by Peter. If this is the case, then Peter will not be liable.
Arthur can also be jointly liable to the contract if he commits his own warranty and that is beyond the level of his own authority as per the tort laws that will be applied in this contract. If personal guarantees are not committed, then he will not be liable as he is not the party to the contract.