Case

Henry is the owner and operator of Farm Equipment Sales Ltd. He hired Hector as a new management trainee starting him at the very bottom but with the eventual aim of becoming a sales representative. The first night on the job, Hector was told to look after the sales floor while Henry and the other sales representatives were at a sales meeting for district representatives about new fann machines. Hector was told to sweep the floors and clean the windows, but if anybody came by to look at fann equipment, he was to take their names and phone numbers to have another sales rep call them or to ask them to come back the next day. He was emphatically and specifically told not to talk to the customers about any fann equipment as he had not been trained. While Hector was cleaning up, Mr. Field, a local fanner, caine in to have a look at a new cultivator. Hector, who had been born and raised on a fann and was actually fairly knowledgeable, could not restrain his enthusiasm and talked to Mr. Field in great detail about the wonderful qualities of the various cultivators. He convinced Mr. Field that one particular model, the least expensive one in the showroom, was ideal for him. He allowed Mr. Field to take the cultivator into the small test field that the dealership had out back. Hector went with Mr. Field because he was not familiar with that particular cultivator. Mr. Field failed to allow enough room at the end of the test field, caught the cultivator on the fence, causing the tractor pulling the cultivator and the cultivator to careen across the adjacent road, smashing into Mr. Swank's car.

Mr. Swank was seriously injured. The car, the tractor, and the cultivator were damaged beyond repair. Fortunately, Hector and Mr. Field were not injured and went back to the showroom. Mr. Field, although he was dazed from the accident, decided he would like to buy a cultivator like the one he had been driving. Hector prepared the agreement of sale and Mr. Field signed it and then he signed on behalf of the fann equipment sales company. The agreement required a deposit to finalize it, and Mr. Field said he would go to the bank the next morning to get the deposit. Hector said that it would take a few days· to replace the cultivator that had been destroyed.

When Henry returned to the store, Hector enthusiastically told him about the cultivator that he had sold to Mr. Field. He then, rather sheepishly, told Henry about the cultivator that had been destroyed. Henry was, very understandably, quite angry. He said that the deal was off, and fired Hector on the spot. The next day Mr. Field came in with a $250 deposit for the cultivator he had purchased the night before. He showed another sales representative the agreement that had been signed by Hector. The sales representative examined the agreement, took the deposit, and handled the sale in the normal way, placing an order for the cultivator. The following week Henry discovered the deposit had been taken on the order and that another sales representative had placed an order for the cultivator. Henry immediately contacted Mr. Field to nullify the order. Mr. Field said that he expected them to honour the agreement. Explain the legal position of all of the parties.