Copy of Dennegar Liability
Published on Jun 12, 2023
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Dennegar Liability
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Introduction
- In this presentation the unusual case of Raritan, New Jersey residents Lee Dennegar and Mark Knutson to be reviewed.
Despite denying knowledge of the credit card's existence, Dennegar finds himself in court over unpaid charges on a card issued in his name. Today, we will examine the concept of apparent authority and consider how Dennegar's probable responsibility for the accusations may be impacted by it.
Definition of Apparent Authority:
- When a principal (Dennegar) gives a third party (AT&T Universal) cause to believe that an agent (Knutson) has the ability to act on the principal's behalf, even if the agent may not actually have such authority, that situation is known as a "apparent of authority." Lee Dennegar could be held accountable for the unpaid balances on the credit card issued in his name under the legal concept of apparent authority.
Definition of Apparent Authority:
- When a principal (Dennegar) gives a third party (AT&T Universal) cause to believe that an agent (Knutson) has the ability to act on the principal's behalf, even if the agent may not actually have such authority, that situation is known as a "apparent of authority." Lee Dennegar could be held accountable for the unpaid balances on the credit card issued in his name under the legal concept of apparent authority.
Factors Supporting Apparent Authority
- Holding out Knutson as a representative;
- Consent to handle cheques and mail.
- Financial responsibility delegation.
- AT&T Universal's reasonable reliance.
1-Holding out Knutson as a representative: Dennegar represented Knutson to AT&T Universal as someone authorized to handle Dennegar's financial affairs by giving him control over their household's finances and other day-to-day office tasks. To manage and get credit card statements is included in this.
2-Consent to handle cheques and mail: Dennegar gave Knutson permission to handle their mail, including credit card statements, and gave him permission to handle their cheques. This shows that Knutson's acts are trusted and relied upon to some extent. Further, Dennegar gave Knutson permission to sign some of their checks as Dennegar's signature, and enabled Knutson to draft checks on their behalf. Dennegar's approval of Knutson's position as finance manager is shown by this.
3- Financial responsibility delegation: Dennegar handed over significant financial duties to Knutson by allowing him to manage their household's finances. It is logical to think that AT&T Universal would have assumed that Knutson had the power to handle credit card charges given that this also includes the administration of invoices and financial activities.
4- AT&T Universal's reasonable reliance: AT&T Universal reasonably relied on Dennegar since it issued the credit card in his name and sent his monthly bills to his address. They trusted Dennegar's conduct and Knutson's apparent power to manage the credit card and related expenses. There was no cause for AT&T Universal to believe Knutson was operating improperly.
2-Consent to handle cheques and mail: Dennegar gave Knutson permission to handle their mail, including credit card statements, and gave him permission to handle their cheques. This shows that Knutson's acts are trusted and relied upon to some extent. Further, Dennegar gave Knutson permission to sign some of their checks as Dennegar's signature, and enabled Knutson to draft checks on their behalf. Dennegar's approval of Knutson's position as finance manager is shown by this.
3- Financial responsibility delegation: Dennegar handed over significant financial duties to Knutson by allowing him to manage their household's finances. It is logical to think that AT&T Universal would have assumed that Knutson had the power to handle credit card charges given that this also includes the administration of invoices and financial activities.
4- AT&T Universal's reasonable reliance: AT&T Universal reasonably relied on Dennegar since it issued the credit card in his name and sent his monthly bills to his address. They trusted Dennegar's conduct and Knutson's apparent power to manage the credit card and related expenses. There was no cause for AT&T Universal to believe Knutson was operating improperly.
Conclusion
- All these things indicate that Knutson appeared to have the right to handle financial matters, including using the credit card that was issued in Dennegar's name, because of Dennegar's actions and agreement. Dennegar could be responsible for the outstanding charges on the card consequently.
This case shows how crucial it is to understand the consequences of apparent authority in business dealings. It emphasizes the significance of effective communication, clearly stated duties and responsibilities, and careful evaluation of acts that could project a sense of authority.
References
- Restatement (Third) of Agency § 2.03,
- Smith v. Young, 163 N.J. 120 (2000),
- Apparent Authority - Legal Information Institute,
- Principles of Agency - Legal Information Institute
