Agency Contracts

Ellen told her employee Mike to purchase a second-hand FAX machine for use in Ellen’s business. Mike looked over a machine that Howard offered for sale. On a test run, Mike discovered that the machine did not operate properly at all times. But Mike believed that the machine could be easily repaired and — at Howard’s price — was an excellent buy. Mike purchased it for Ellen’s business.

Shortly after delivery, Ellen learned for the first time that the FAX machine did not operate properly at all times. She immediately demanded that Howard take the machine back and return to her the full purchase price.

Will Ellen be able to get out of Mike’s deal to purchase the machine?