Asked by
Carlos Mendez
on Nov 10, 2024
Verified
Which of the following is true with respect to the agency relationship?
A) An agent acting gratuitously can never bind the principal.
B) An agent's apparent authority may be implied from the position that the agent holds in the employer's organization.
C) When a principal has specifically limited the authority of the agent, that agent can never bind the principal in a contract, even if the agent acts outside his authority.
D) An agent's authority is limited to whatever authority the principal specifically gives the agent.
E) Actual authority is the authority the principal has implied in conversations with a third party.
Apparent Authority
A situation where a person appears to have been given the power by another (such as an employer) to act on their behalf, leading others to reasonably believe they have such authority.
Gratuitously
Done without receiving any return or compensation; freely.
Principal
The original sum of money lent or invested, excluding any interest or dividends.
- Acquire knowledge on concepts surrounding actual, implied, and apparent authority, and its implication on the roles and legal responsibilities of agents and principals.
Verified Answer
AS
Learning Objectives
- Acquire knowledge on concepts surrounding actual, implied, and apparent authority, and its implication on the roles and legal responsibilities of agents and principals.