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BUSINESS LAW
CASE BRIEF: Taylor v. Ramsay-Gerding Construction Co.
196 P.3d 532 (Or. 2008)
FACTS: Hotel owner became concerned about possible rusting in the exterior stucco system manufactured by ChemRex that was being installed at the hotel. The general
contractor, Ramsay-Gerding, arranged a meeting with ChemRex’s territory manager, McDonald, to discuss concerns. McDonald assured the hotel owner that the system was “bulletproof
against rust,” and stated that “you’re getting a five-year warranty.” He followed up with a letter confirming the five-year warranty. A year later rust discoloration appeared, and no one from
ChemRex ever fixed the problem. Taylor sued ChemRex for breach of warranty. ChemRex defended that McDonald did not have actual or apparent authority to declare such a warranty.
ISSUE: Did ChemRex (the principal) take sufficient action to create the appearance of authority on the part of McDonald (the agent)?
HOLDING: Yes
REASONING: ChemRex clothed McDonald with the title of “territory manager” and gave him the authority to visit job sites and resolve problems. Although it denies he had actual authority,
ChemRex took sufficient steps to create apparent authority to provide the five-year warranty on the stucco system. The actions of ChemRex led the plaintiff to believe that McDonald was
authorized to provide the warranty.
DISCUSSION POINTS: Discuss how actual authority to perform some tasks can create apparent authority to perform other related tasks using the Taylor v. Ramsay-Gerding Construction Co.
case.
Please use Chapter terms from Chapter 37 when discussing this case. Make sure you use complete sentences.
CHAPTER 37 KEY TERMS
agency
agent
apparent authority
attorney in fact
customary authority
express authorization
general agent
incidental authority
independent contractor
interest in the authority
interest in the subject
matter
power of attorney
principal
special agent
universal agent
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