Can a company hold another company liable for charges if the wrong person gave verbal authorization?

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Can a company hold another company liable for charges if the wrong person gave verbal authorization?

I work for a leasing company and received a call from one of our advertisers; in error I gave authorization and was not the person authorized to do so. Now there’s a bill for services which they state is payable regardless of who gave authoriation. Is that correct?

Asked on May 31, 2012 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If to a reasonable outsider--like this advertiser--you would seem to have authority to do the thing you did, then yes, they can hold your company liable. An outside vendor, contractor, service provider, etc. is not required to prove or confirm that the employee it speaks to has authority, since doing so is often impractical and not infrequently impossible; rather, they are allowed to rely on the employee's "apparent authority" so long as a reasonable person, in those circumstances, would conclude that the employee had the authority to do what he or she did.


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