Beele authorized McDonald to be his agent to go to Denver
and purchase some real estate that would be suitable to open up a
branch office for Beele’s business. He tells McDonald not to pay
more than $125,000 for the real estate. McDonald contacts York
to buy some real estate she owns. York calls Beele and Beele tells
York that McDonald is his agent to buy the real estate. Nothing
is mentioned about the $125,000 limitation. After negotiations
between McDonald and York, McDonald signs a contract purchasing
the real estate for $140,000. McDonald signed it indicating
on the contract that he was signing as agent for Beele.
Further facts show that the real estate is worth $140,000.
Which of the following is correct?

(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.