## Facts

- Hamilton Hauling, Inc. (Hamilton), owned by Warren Hamilton, had supplied goods and services to GAF’s Kansas City plant since 1954, always on a purchase-order basis that allowed cancellation.
- John A. Bajt worked as a purchasing agent/buyer at GAF’s Kansas City plant from 1973 to 1980 and handled day-to-day procurement of raw materials and supplies for plant production.
- Hamilton and Bajt negotiated for several months about Hamilton supplying raw materials (including wood chips). Hamilton was hesitant because supplying the materials required significant investment and because GAF had previously canceled two raw-material purchase orders.
- On February 1, 1979, Bajt and Hamilton executed a written agreement at Hamilton’s office stating GAF would buy a minimum of more than $800,000 of raw materials each year for 10 years.
- Bajt did not send the contract to GAF’s corporate headquarters. According to the record, no one at GAF knew about the agreement except Bajt’s secretary.
- After signing the agreement, Bajt continued to purchase raw materials from Hamilton using standard GAF purchase orders. Those purchase orders were cancellable and differed from the purported long-term contract.
- GAF’s internal policy limited buyers at Bajt’s level to purchase orders not exceeding $25,000 in amount or one year in duration without advance approval from corporate headquarters.
- In Bajt’s final year, he purchased approximately $6,000,000 in raw materials for the plant, all through purchase orders within his actual authority; there was no proof that buyers like Bajt customarily made long-term or over-limit contracts, and Bajt had not made any other long-term contracts for GAF.
- Hamilton knew GAF had previously made a long-term wood-chip contract with another vendor and that it had been signed at corporate headquarters, not at the plant level.
- Hamilton also had experience making long-term contracts with other corporations, and in those dealings the contracts were prepared and executed at the other companies’ corporate headquarters rather than by local plant personnel.
- In September 1980, GAF terminated Bajt. In December 1980, GAF told Hamilton it would not accept further deliveries of raw materials. Hamilton produced the February 1979 contract; GAF disclaimed knowledge and asserted Bajt lacked authority.
- Hamilton sued GAF for breach of contract. A jury returned a verdict for GAF. Hamilton appealed, focusing on alleged errors in the jury instructions concerning apparent authority and related matters.

## Issues

1. Whether Hamilton was barred from challenging the apparent-authority instruction under the invited-error doctrine because Hamilton “offered” the instruction after the trial court rejected Hamilton’s preferred instruction.
2. Whether Hamilton preserved its instructional objections under Missouri Rule 70.03 despite GAF’s claim that Hamilton’s objections were not sufficiently specific.
3. Whether the instruction defining apparent authority improperly required the jury to find that Hamilton knew GAF had knowingly permitted Bajt to enter into long-term contracts, rather than focusing on GAF’s manifestations and Hamilton’s reasonable reliance.

## Decision

- The Missouri Court of Appeals, Western District, affirmed the judgment on the defense verdict for GAF.
- The court held Hamilton was not barred by invited error because Hamilton’s submission of the instruction as given occurred after the trial court refused Hamilton’s proposed instruction and indicated it would give GAF’s version; Hamilton’s modifications were not substantive enough to constitute adoption of the theory.
- The court concluded Hamilton’s objections were adequate to preserve review under Rule 70.03, so the court addressed the merits of the instructional challenge.
- On the merits, the court found no reversible error: the instructions, read as a whole, properly limited apparent authority to authority traceable to GAF’s conduct (not merely Bajt’s actions or claims) and allowed the jury to reject Hamilton’s apparent-authority theory.

## Legal Principles

- Apparent authority depends on the principal’s words, actions, or knowing acquiescence that would cause a reasonable third party to believe the agent is authorized; it cannot be created solely by the agent’s own statements or conduct.
- A third party asserting apparent authority must show reasonable reliance on the appearance of authority and resulting harm; the reasonableness of the belief is judged in light of the parties’ history and the surrounding circumstances.
- A longstanding course of dealing limited to cancellable purchase orders can support a finding that a plant-level buyer was not held out as having power to bind the corporation to an extraordinary long-term, high-dollar commitment.
- Internal corporate limits on a buyer’s authority do not automatically bind third parties, but they may bear on whether it was reasonable for the third party to believe the agent had authority when there was no principal conduct suggesting power to make an exceptional contract.
- Under the invited-error doctrine, a party generally cannot complain about an instruction it selected or devised as its own theory of submission, but the doctrine does not apply where the party’s “offer” occurred under the trial court’s stated intent to give the opposing party’s instruction and the changes were not substantive.
- To obtain appellate review of instructional error, a party must make objections with enough detail to identify the claimed defect (Rule 70.03); preservation is evaluated from the full record of the instruction conference and related objections.

## Conclusion

The court affirmed the verdict for GAF because the challenged instructions properly required apparent authority to be based on manifestations attributable to GAF and not on Bajt’s undisclosed dealings, and the record—marked by a long purchase-order-only relationship, corporate-level execution of long-term contracts, and the secret nature of the February 1979 agreement—supported the jury’s rejection of Hamilton’s claim that Bajt had apparent authority to bind GAF to a 10-year minimum-purchase contract.


Hamilton Hauling, Inc. v. GAF Corp., 719 S.W.2d 841 (1986)