Helen owns Helen's Heavenly Bakery, specializing in catered events like weddings. Isaak owns a reception hall where couples hold receptions after a wedding. One day while Isaak is meeting with a couple to plan their reception, they happen to mention that they will need a large cake for the reception. Isaak tells them that Helen's Heavenly Bakery will supply the cake for them. He takes down the details of the order and quotes a price. (He names a price that is high enough that he is sure Helen will be happy to have the job.)Later he calls Helen and tells her that he has promised that she will bake a cake for this wedding reception at his reception hall. He gives her the details over the phone. She says, "That's great, Isaak. I can do that. Send me the order."Which type of agency does this example most closely represent? Group of answer choicesApparent AgencyBusiness to Business AgencyAgency by ratificationImplied Agency
Question
Helen owns Helen's Heavenly Bakery, specializing in catered events like weddings. Isaak owns a reception hall where couples hold receptions after a wedding. One day while Isaak is meeting with a couple to plan their reception, they happen to mention that they will need a large cake for the reception. Isaak tells them that Helen's Heavenly Bakery will supply the cake for them. He takes down the details of the order and quotes a price. (He names a price that is high enough that he is sure Helen will be happy to have the job.)Later he calls Helen and tells her that he has promised that she will bake a cake for this wedding reception at his reception hall. He gives her the details over the phone. She says, "That's great, Isaak. I can do that. Send me the order."Which type of agency does this example most closely represent? Group of answer choicesApparent AgencyBusiness to Business AgencyAgency by ratificationImplied Agency
Solution
To determine the type of agency represented in the scenario, let's analyze the details step by step:
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Isaak's Actions: Isaak, without prior explicit authorization from Helen, promises the couple that Helen's Heavenly Bakery will supply the cake for their wedding reception. He takes down the details and quotes a price.
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Helen's Response: When Isaak informs Helen about the order, she agrees to fulfill it and asks him to send her the order details.
Now, let's evaluate the types of agency:
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Apparent Agency: This occurs when a third party reasonably believes that an agent has the authority to act on behalf of a principal, even if the agent does not have actual authority. In this case, the couple might believe Isaak has the authority to act on behalf of Helen's bakery.
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Business to Business Agency: This typically involves formal agreements between businesses where one business acts on behalf of another. There is no indication of a formal agreement between Helen and Isaak prior to this event.
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Agency by Ratification: This occurs when a principal approves and accepts the actions of an agent after the fact. Helen's acceptance of the order after Isaak promised it could be seen as ratification.
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Implied Agency: This arises from the conduct or situation of the parties, suggesting that the agent has authority to act. There is no indication that Helen and Isaak had an ongoing relationship that implied such authority.
Given the details, the most fitting type of agency is Agency by Ratification. Helen ratified Isaak's actions by agreeing to fulfill the order after he had already promised it to the couple.
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