Litigation

Apparent authority supports warranty liability, Oregon Supreme Court holds

By Lori Bauman

The Oregon Supreme Court today addressed the scope of an agent's apparent authority in a case involving failed stucco siding.  In Taylor v. Ramsay-Gerding Construction Co., a building owner expressed concerns during construction about the performance of the stucco exterior.  In response, the territory manager for the stucco system's manufacturer stated orally and in a letter that the manufacturer gave a five-year warranty.  Soon after construction was complete the stucco became discolored due to rust, and the owner sued on the manufacturer's warranty.  The manufacturer contended that its manager had neither express nor apparent authority to issue the warranty.

The Supreme Court held that, while the agent lacked express authority, there was sufficient evidence to find apparent authority.  First, the manufacturer created apparent authority by assigning the agent to visit building sites and work with customers to solve problems.  Further, the agent's letter agreeing to the warranty reasonably led the owner to believe that the agent had authority.  For these reasons, the Supreme Court held that the jury properly found in favor of the owner.

Full post as published by Northwest Business Litigation Blog on November 06, 2008 (boomark / email).