Contract Law - Nature of contract and circumstances of employment

What this page is about: Nature of contract and circumstances of employment

In order that a contract may fall within the apparent scope of the employee's authority the contract must be one the making of which is incidental to the duties which the employee is employed to perform1. The same tests are to be applied as for the purpose of determining the responsibility of a principal for the acts of his agent, although the tests might produce different results in the case of an employee2.

The implied authority of an employee must, as a matter of course, vary according to the nature of his employment, and need not necessarily include an authority to contract at all. Employees are of different grades, and the authority to be implied in the case of one may be more extensive than in the case of another holding a more subordinate position3. The employee may be employed to perform a particular duty only, in which case he has no general authority to bind his employer by contract4. If the making of a particular class of contracts is incidental to the duty which he is employed to perform, any contract of that class will bind his employer on the ground that an authority to make it's to be implied from the nature of his employment5. Where, however, the contract belongs to a different class, the employer isn't liable, since his employee is no longer acting in the course of his employment; and has therefore no implied authority to make it6. If, on the other hand, the employee is given a general authority to conduct his employer's business, his authority is wider in its scope, and the employer will be liable upon all contracts made by the employee in the ordinary course of business7.

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Also in this section:

1170. Contracts made by an employee under express authority
1171. When authority is implied
1172. Estoppel
1173. Ratification
1174. Employer's conduct
1175. Apparent scope of employee's authority
1177. Nature of employer's business
1178. Notice of determination of authority
1179. Employer under disability
1180. Employer a minor
1181. Employer suffering from mental disorder
1182. Corporations
1183. Liability of trustees and personal representatives for employees' acts
1184. Crown's liability on contracts