Breach of warranty of authority

An agent can make contracts between his principal and a third party. When he does this he “warrants” (or “promises” to the third party) that he has authority to carry out the act. When an agent, for example, a shipbroker, acts without any authority from his principal or exceeds the authority given to him, there is no contract and the principal is not bound. The agent can then become liable to one, or both, of the parties to the presumed contract for the breach of the warranty of authority.