First Principles of Business Law

1. General concepts underlying agency

1.5. The legal position of a person acting as a representative

If a person acts as a representative for another person when carring out a legal transaction, what is the legal position of the representative?  Consider the following facts and then answer the questions.

A employs B as his assistant. He instructs B to go to a neighbouring town where C is offering to sell an electric pump for $1000. A tells B to negotiate on his behalf to buy the pump for no more than $900. B tells C he is acting for A and then agrees to buy the pump for $900. C delivers the pump to A but A fails to pay C for it.

1. Is it clear from the facts that B has acted as A's representative when agreeing to buy the pump from C?

2. C argues that because B actually negotiated the contract, both A and B are parties to the transaction and liable to be sued on it. Is C correct?