ISM CPSM CORE Question # 28 Topic 3 Discussion

In this scenario, the supply manager signed a contract exceeding their documented authority limit, but verbally assured the supplier of an increased signing limit. The key issue is the concept of apparent authority.

Successful, as the supplier should have respected the written signing policy: This disregards the principle of apparent authority.

Unsuccessful, because the supply manager's verbal statement represents a binding agreement: Verbal statements alone may not constitute a binding agreement without supporting apparent authority.

Unsuccessful, as the supply manager's status and statement constitute apparent authority: Apparent authority exists when a third party reasonably believes that an individual has the authority to act on behalf of the organization. The supply manager's role and assurances create a reasonable perception of authority.

Successful, provided the disavowal occurs within three business days of contract signing: No standard provision supports this within the given context.

Therefore, the attempt to disavow the contract will likely be unsuccessful, as the supply manager's status and statement constitute apparent authority.

References:

Contract law principles on actual and apparent authority.

Case studies on organizational liability for employees' actions.