Detailed Answer
(a) Since Beele authorized McDonald to be his agent,
the secret limitation has no effect on York. York may enforce the
contract for the full $140,000. Answer (b) is incorrect because
Beele authorized McDonald to be his agent. Even though his
agent was instructed to pay at most $125,000 in the contract, this
was a secret limitation that did not limit York who was unaware
of it. Answer (c) is incorrect because McDonald was given authority
to purchase real estate on Beele’s behalf. The limitation
on the dollar amount was not known by York and therefore does
not limit her. Answer (d) is incorrect because although York can
enforce the contract against Beele, it is because Beele gave authority
to McDonald rather than how much the real estate is
worth.