SW Legal Educational Publishing

Case for Breach of Implied Warranty of Authority Runs from Time of Learning the Truth
Description Appeals court held that a cause of action against a party who purported to have the authority to act on behalf of principals to a contract began at the time the party, who presumed the alleged agent had authority, was informed by the principals that there was no authority.
Topic Agency
Key Words Implied Authority
C A S E   S U M M A R Y
Facts In 1967, Margolis leased property from B&J for 25 years with an option to extend for another 25 years. Margolis then subleased the property to a third party for more than 25 years. In 1980 and in 1981, Margolis sent a letter to B&J exercising the option to extend the lease for 25 years. In 1981 Margolis received a letter from Charles, a relative of B&J, purporting to authorize the extension of the lease on their behalf. In 1992, B&J informed Margolis that Charles was not authorized to extend the lease and, therefore, the lease option had not been exercised. Margolis sued Charles in 1997 for breach of implied warranty of authority. Trial court dismissed the suit, holding that the statute of limitations had run. Margolis appealed.
Decision Affirmed. "In an action on an implied warranty of authority to act as agent in making a contract, the action is not on the contract purported to have been authorized, but it is on the unauthorized conduct of the supposed agent, who acted under claim of authority." "The cause of action accrues when the third person learns that the agent does not have authority, or when he suffers damage ... whichever occurs first." Since B&J informed Margolis in 1992 of the lack of authority, his cause of action against Charles began to run at that time and had expired prior to 1997.
Citation Margolis v. Andromides, 732 So.2d 507 (Dist. Ct. of App., Fla., 1999)

Back to Agency Listings

©2000  South-Western, a division of Cengage Learning, Inc. Cengage Learning is a trademark used herein under license.