Which amongst the following options is true, regarding apparent authority? Select one: a. The agent has acted beyond the scope of their actual authority, but the agent appears to have authority to act on behalf of the principal in the circumstances because of the conduct of the principal. b. The principal has given the authority to the agent, but the agent appears to have no authority to act on behalf of the principal. c. The principal will never be bound by the actions of an agent who has done the wrong thing by exceeding their actual authority. d. The principal is not bound by the actions of an agent done with apparent authority unless the principal ratifies the transaction.
Question
Which amongst the following options is true, regarding apparent authority?
Select one:
a. The agent has acted beyond the scope of their actual authority, but the agent appears to have authority to act on behalf of the principal in the circumstances because of the conduct of the principal.
b. The principal has given the authority to the agent, but the agent appears to have no authority to act on behalf of the principal.
c. The principal will never be bound by the actions of an agent who has done the wrong thing by exceeding their actual authority.
d. The principal is not bound by the actions of an agent done with apparent authority unless the principal ratifies the transaction.
Solution
The correct answer is:
a. The agent has acted beyond the scope of their actual authority, but the agent appears to have authority to act on behalf of the principal in the circumstances because of the conduct of the principal.
This is the definition of apparent authority. It is a legal concept that allows a principal to be held liable for the actions of an agent, even if the agent acted outside their actual authority, as long as the third party reasonably believed the agent had authority based on the principal's conduct.
Similar Questions
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