Tanner hires Andrea under a written contract to purchase antiques for him. Andrea's friend Carley is an antique dealer and agrees in writing to sell
a set of Louis XIV chairs for $5800. Although Andrea could have purchased similar chairs elsewhere for under $5000, she decides to purchase the
chairs from her friend. Andrea signs as an agent of Tanner. Tanner gives Andrea the cash for the purchase, but Andrea decides to use $1000 to pay
some of her own bills and transfers the other $4800 to Carley. Carley sends an invoice to Elliot for the balance of $1000. Does Tanner have to pay
that balance?
Yes, Tanner bears the risk of loss associated with his agent's breach of the fiduciary duties and still owes the payment for the chairs, since the
contract was negotiated by Andrea with express authority.
O Yes. Even if Carley and Andrea are in collusion to defraud Tanner, Tanner is bound to the contract because he gave Andrea express authority to
buy the chairs.
O No, Andrea breached the fiduciary duty of accounting, so Tanner only owes what was already paid.
O No, Tanner can rescind the entire contract with the third party (Carley) because his agent breached fiduciary duties.