Essco Geometric v. Harvard Industries

Harvard Industries' (defendant) purchasing manager historically had unilateral authority to select foam suppliers and negotiate contracts; after a new president, Kruske, took over, Harvard adopted an internal (never externally communicated) policy requiring his approval for supplier decisions, though evidence showed this was a mere rubber-stamp formality Kruske never actually declined. Around the same time, Harvard's performance review of purchasing manager Gray encouraged him to take a more active managerial role; Gray then agreed to a supply contract with Diversified (plaintiff) without Kruske's approval, which Kruske later discovered and rejected, redirecting the business to a competitor instead. Diversified sued for breach of contract; a jury found for Diversified based on Gray's implied and apparent authority, and Harvard's motion for judgment as a matter of law was denied. Harvard appealed.