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Hannah, an administration manager of a catering supply company, was authorised by her general manager...

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Accounting

Hannah, an administration manager of a catering supply company, was authorised by her general manager to order various equipment that would be needed by their restaurant customers. Her budget was $10,000 a week. For each of the four weeks of August, Hannah proceeded to place orders from their regular wholesaler, Kitchens Galore, worth $12,000 per week. She knew that she was exceeding her weekly budget, but she did this because Kitchens Galore was running a loyalty program whereby clients who spent at least $48,000 in one month with the store would receive a 20% discount on all purchases for the next 3 months. Hannah thought that her general manager would appreciate it if she saved their company some money by qualifying for Kitchens Galore's loyalty program.

The general manager eventually found out what Hannah had done when he received an invoice from Kitchens Galore at the end of August. He called the wholesaler and told them that it would only pay a maximum of $40,000. Kitchens Galore insists that they should be paid $48,000 because this was what Hannah, an authorised representative of the catering supply company, had ordered.

Is Hannah's company obligated to pay the higher amount?

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