Uploaded February 2025 | Updated September 2026, 2 weeks ago
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Newberry v. Barth, Inc. - Iowa Supreme Court
252 N.W.2d 711 (1977)
An agent is a party that acts on behalf of another, known as the principal.
In Newbury versus Barth Incorporated, we explore the scope of an agent's authority to bind a principal to a contract.
Florence and Paul Barth formed Barth Incorporated, a corporation, to purchase an apartment complex.
The purchase was financed by a loan insured by the Federal Housing Administration.
Under the terms of the corporation's articles of incorporation, the corporation couldn't sell the complex without the housing administration's approval.
Florence and Paul both held officer positions in the corporation, and Florence managed the apartment complex.
After Paul's death, Florence signed a contract to sell the complex to Donald Newbury.
However, Florence didn't tell Newbury that the corporation owned the complex or that the housing administration's approval was required for the sale.
After a dispute arose over the sale, Newbury brought suit, seeking specific performance of the sales contract, on the ground that Florence was acting as the corporation's agent. The corporation responded that Florence had no authority to bind the corporation, and it therefore couldn't be compelled to complete the sale.
The trial court ruled in Newbury's favor, and ordered the corporation to perform under the contract. The corporation appealed to the Iowa Supreme Court.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
Newberry v. Barth, Inc. - Iowa Supreme Court
252 N.W.2d 711 (1977)
An agent is a party that acts on behalf of another, known as the principal.
In Newbury versus Barth Incorporated, we explore the scope of an agent's authority to bind a principal to a contract.
Florence and Paul Barth formed Barth Incorporated, a corporation, to purchase an apartment complex.
The purchase was financed by a loan insured by the Federal Housing Administration.
Under the terms of the corporation's articles of incorporation, the corporation couldn't sell the complex without the housing administration's approval.
Florence and Paul both held officer positions in the corporation, and Florence managed the apartment complex.
After Paul's death, Florence signed a contract to sell the complex to Donald Newbury.
However, Florence didn't tell Newbury that the corporation owned the complex or that the housing administration's approval was required for the sale.
After a dispute arose over the sale, Newbury brought suit, seeking specific performance of the sales contract, on the ground that Florence was acting as the corporation's agent. The corporation responded that Florence had no authority to bind the corporation, and it therefore couldn't be compelled to complete the sale.
The trial court ruled in Newbury's favor, and ordered the corporation to perform under the contract. The corporation appealed to the Iowa Supreme Court.
Want more details on this case? Get the rule of law, issues, holding and reasonings, and more case facts here: quimbee.com/cases/newberry-v-barth-inc
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