Ahmed, who is very knowledgeable regarding computers, agrees to purchase compute

Question

Ahmed, who is very knowledgeable regarding computers, agrees to purchase computers for Khaled's business. Ahmed is retained at Khaled’s business for that purpose only, he is paid a set rate for the job, and Khaled exercised no control over the manner in which Ahmed did his work. Ahmed purchased computers from HP Computers’ company without any mention of Khaled. The computers worked well and were not defective in any way. Unfortunately, Khaled did not pay HP Computers on a timely basis. Ahmed, therefore, paid HP Computers out of his own pocket because he wanted to be able to do business with HP in the future and also because his name was on the invoice. Ahmed asked Khaled for reimbursement, but Khaled refused, claiming that if Ahmed had only waited, HP Computer might have agreed to take less. 1- Explain Ahmed’s status in regards to his employment with Khaled? 2- Does Ahmed have the right of reimbursement from Khaled? 3- Did Ahmed have any legal liability to HP Computers? Why? 4- At the same scenario, assume that Ahmed was an employee at Khaled’s company. What type of principal Khaled could be?

Explanation / Answer

Answer (1)

In this case Ahmed has been retained by Khaled for purchase of computers for Khaled’s business. As it is mentioned in the case that Ahmed has been retained by Khaled for purpose and paid a set rate for the job, there exists an agent and principal relationship between Ahmed and Khaled.

Answer (2)

Ahmed has taken the assignment for Khaled due to the following reasons

Based on the above factors, there is an implied authority provided by Khaled to Ahmed purchase computers on his behalf. This converts to an express authority if there is correspondence to this effect between them.

Hence Ahmed has a right to get reimbursement from Khaled for the computers ordered by him for Khaled though the invoices are in the name of Ahmed

Answer (3)

Ahmed has a legal liability to HP as a purchaser of computers and is liable for any delayed interest charged by them.

Answer (4)

If Ahmed was an employee at Khaled’s company, Khaled then becomes purchaser even though Ahmed ordered computers in his name for use in the company as he is acting under the orders of his employer. Hence it is the primary responsibility of Khaled to make payment for the computers.

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