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Agent and Principal liability

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Paulette is the owner of the Rock On Mobile Home Park. For several years, Albert regularly collected rent for Paulette from the tenants of the mobile home park. Recently, Paulette learned that Albert pocketed some rent he collected, so Paulette fired Albert, and revoked his authority to collect rent payments from tenants. However, neither Paulette nor Albert told any tenants of Albert's termination. Yesterday, Albert went around to Theresa's mobile home and asked for the rent. Theresa paid Albert the money owed to Paulette. Albert never gave this money to Paulette.

Is Theresa liable to pay Paulette? Why or why not? What legal principle did you apply? Discuss an agent's obligations toward his principal.

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Solution Summary

Paulette is the owner of the Rock On Mobile Home Park. For several years, Albert regularly collected rent for Paulette from the tenants of the mobile home park. Recently, Paulette learned that Albert pocketed some rent he collected, so Paulette fired Albert, and revoked his authority to collect rent payments from tenants. However, neither Paulette nor Albert told any tenants of Albert's termination. Yesterday, Albert went around to Theresa's mobile home and asked for the rent. Theresa paid Albert the money owed to Paulette. Albert never gave this money to Paulette.

Is Theresa liable to pay Paulette? Why or why not? What legal principle did you apply? Discuss an agent's obligations toward his principal.

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Theresa is not libable to pay Paulette because Theresa reasonably believed that Albert had apparent authority to collect the rents, and because ...

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