Question
ally Trosen is the sole member and Joni has been given the title of office manager of Trosen and Company, LLC. Lesa is a sales
ally Trosen is the sole member and Joni has been given the title of "office manager" of "Trosen and Company, LLC". Lesa is a sales person for the Kirksville Daily Express, calls upon the business in person and asks to speak to the person in charge about placing an ad in the paper to congratulate winners of the livestock show at the NEMO Fair. Wally tells Joni in Lesa's presence -- "you handle it". Joni enters into a contract on behalf of Trosen and Company to spend $500 on a small ad and Lesa leaves happy that she has just met her sales quota. When Wally learns about the contract -- he is livid, reminds Joni that the LLC had no money in its budget for advertising and calls Lesa and tells her that Joni did not have authority to enter into the agreement. What will be the result?
A. | Trosen and Company will NOT be bound by the contract because Joni did not have actual authority to enter into the contract. | |
B. | Trosen and Company will be bound by the contract because Wally's carelessness violated the business judgment rule. | |
C. | Trosen and Company will be bound by the contract because Joni had apparent authority to bind the LLC. | |
D. | Trosen and Company will not be bound by the contract because of the doctrine of respondeat superior. |
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