Summit Properties, Inc. v. New Technology Electrical Contractors, Inc.
United States District Court for the District of Oregon
2004 WL 1490327 (2004)
New Technology Electrical Contractors' (New Tech) (defendant) vice president of finance, Crouser, signed a lease on New Tech's behalf with a related company owned by New Tech's president, Coleman, shortly after New Tech was sold to Integrated Electrical Services (IES) (defendant). Before purchasing the leased property, Summit Properties (Summit) (plaintiff) confirmed with IES's senior counsel that New Tech was IES's subsidiary, and afterward both companies' employees occupied the property for about two years while IES publicly acknowledged the move; only after New Tech's finances soured and Coleman was fired did IES investigate and claim the lease was signed without proper corporate authority, leading to litigation over the lease's validity.
Whether a contracting party may rely on the apparent authority of an agent to bind the principal, so long as the contracting party does not know or have reason to know that the agent lacks actual authority.