Agency Creation and Legal Nature Quiz
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Questions and Answers

In agency relationships, who is an agent?

  • The third party
  • A person with authority to establish legal relationships on behalf of the principal (correct)
  • A person with authority to establish legal relationships on behalf of the third party
  • The principal

    • What is the legal nature of a Power of Attorney in the creation of agency?

  • It is an example of implied authority
  • It creates actual authority through written words
  • It is a formal way of appointing an agent by deed (correct)
  • It grants the agent apparent authority

    • Which type of authority arises from occupation in the creation of agency?

  • Actual authority
  • Apparent authority
  • Implied authority (correct)
  • Express authority

    • What happens when an agent acts within their authority in agency relationships?

    <p>Agent is not liable to either the principal or the third party (B)</p> Signup and view all the answers

    What type of authority is implied by taking into account the overall circumstances of the situation?

    <p>Implied authority (A)</p> Signup and view all the answers

    Which legal concept involves a situation where an agent doesn't have actual authority but appears to have it due to the principal's conduct?

    <p>Apparent/Ostensible Authority (A)</p> Signup and view all the answers

    What makes a Power of Attorney a formal way of appointing an agent?

    <p>It is granted by deed (C)</p> Signup and view all the answers

    In which situation can apparent authority be effectively applied?

    <p>When there is a representation of authority and the third party relies on it to enter into a contract (B)</p> Signup and view all the answers

    What approach is used to dispel the application of apparent authority in different situations?

    <p>Placing public notices in newspapers advertising the termination of the agency (B)</p> Signup and view all the answers

    What condition must be met for ratification of an unauthorized contract to be valid?

    <p>The ratification must occur within a reasonable time (B)</p> Signup and view all the answers

    In the case of Freeman & Lockyer v Buckhurst Park Properties, who may have apparent authority based on the text?

    <p>The company officers and directors (A)</p> Signup and view all the answers

    What action does ratification involve according to the text?

    <p>Granting retrospective authority to the agent (A)</p> Signup and view all the answers

    What induces a third party to enter into a contract based on apparent authority?

    <p>The belief that the agent has authority based on a representation by the principal (B)</p> Signup and view all the answers

    What must the principal possess for ratification of an unauthorized contract?

    <p>Awareness of all material facts (C)</p> Signup and view all the answers

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