Asked by
Saudia Gafoor
on Nov 10, 2024Verified
When an agent's authority is terminated by mutual agreement, what is the impact on the agent's actual and apparent authority?
A) The actual authority continues until the third party is notified of termination, but the apparent authority ceases.
B) Both the actual authority and the apparent authority continue until the third party is notified of termination.
C) Both the actual authority and the apparent authority immediately cease.
D) The actual authority ceases, but the apparent authority continues until the third party is notified of termination.
E) Both the actual authority and the apparent authority continue, because an agent's authority cannot be terminated by mutual agreement.
Actual Authority
The explicit power given to an agent or representative by a principal, allowing them to make decisions and act on the principal's behalf.
Apparent Authority
Apparent authority refers to a situation where a person appears to have the authority to act on behalf of another (such as an employer) even if no actual authority has been granted, leading others to reasonably believe in that authority.
Mutual Agreement
An accord reached by two or more parties who have made concessions to each other to resolve a conflict or reach a decision.
- Identify factors that affect the termination of an agent's authority and the subsequent impacts.
Verified Answer
PC
Learning Objectives
- Identify factors that affect the termination of an agent's authority and the subsequent impacts.