Opinion ID: 76376
Heading Depth: 2
Heading Rank: 3

Heading: Whetstone's Arguments Based on an Agency Relationship Between Kraft UK and Kraft NA

Text: 26 Whetstone also argues that because Kraft NA acted as the agent of Kraft UK during the settlement negotiations, Kraft UK is bound by the agreement. Alternatively, Whetstone contends that Kraft NA had apparent authority to bind Kraft UK. We hold that Kraft NA was not the agent of Kraft UK and that the doctrine of apparent authority is not applicable to this case.
27 Whetstone's actual authority argument fails because there was no agency relationship in this case. 13 For actual authority to exist such that the principal is bound, there must be an agency relationship, which requires: (1) the principal to acknowledge that the agent will act for it; (2) the agent to manifest an acceptance of the undertaking; and (3) control by the principal over the actions of the agent. MeterLogic, Inc. v. Copier Solutions, Inc., 126 F.Supp.2d 1346, 1354 (S.D.Fla.2000). 28 There is no agency relationship here because there was no acknowledgment by Kraft NA that it would act for Kraft UK. Whetstone provides no evidence that the Kraft NA negotiators were actually employees of Kraft UK, nor does Whetstone claim that Kraft UK financed the business venture of Kraft NA, or offer any credible argument that Kraft UK authorized Kraft NA to act on its behalf. See id. at 1355 (evaluating these factors to determine whether there is acknowledgment). In addition, there is no question that the final element of an agency relationship — control — is lacking here; Whetstone provides no evidence that Kraft UK controlled Kraft NA during the settlement negotiations. 14 As such, we fail to find any evidence that there is an agency relationship between Kraft NA and Kraft UK.
29 There was no reasonable basis for Whetstone to believe Kraft NA was the agent of Kraft UK and, consequently, apparent authority is not present in this case. Apparent authority exists when the principal creates the appearance of an agency relationship. Ja Dan, Inc. v. L-J Inc., 898 F.Supp. 894, 900 (S.D.Fla.1995). The appearance of an agency relationship can be created when the principal knowingly permits the agent to act as if the agent is authorized, or by silently acting in a manner which creates a reasonable appearance of an agent's authority, but cannot arise from the subjective understanding of the person dealing with the purported agent. Id. 30 Here, Whetstone argues that Kraft UK, by remaining silent and failing to object to the Settlement Agreement, acted in a manner that reasonably created the appearance of Kraft NA's authority to act for Kraft UK. Because Kraft UK had no input into the Settlement Agreement and because the agreement resolved only a dispute between Kraft NA and Whetstone, there was no reason to expect Kraft UK to object to the agreement. Thus, it was merely the subjective understanding of Whetstone that Kraft NA was the agent of Kraft UK and, as stated above, such an understanding does not create apparent authority. 15