20 Questions
What is the legal nature of an agency?
It is a fiduciary relationship.
In the context of agency, who is considered an agent?
A person who establishes legal relationships with third parties on behalf of the principal.
What happens if an agent acts within their authority in an agency relationship?
The agent is not liable to either the principal or the third party.
How can actual authority be granted to an agent?
By express (written words) or implied (circumstances) methods.
What is ostensible or apparent authority in an agency relationship?
When a principal's conduct leads third parties to believe the agent has authority.
What is one of the duties of an agent towards the principal in maintaining a fiduciary relationship?
Providing full disclosure and avoiding conflicts of interest
What is one of the remedies available to a principal when an agent makes a secret profit from a third party?
Rescinding the contract and refusing to pay the agent's commission
Under what circumstances can an agent claim a commission for services rendered?
Only after performing all obligations fully
In a relationship between an agent and a third party, when is the agent personally liable under the contract?
When acting within authority but committing a tort
What is one of the exceptions to the general rule where an agent is not personally liable to a third party?
Agent acting within authority but breaching warranty of authority
What is one of the approaches adopted to prevent third parties from arguing apparent authority?
Placing public notices in newspapers advertising the termination of the agency
In the context of ratification, what does the principal have a choice to do when an agent exceeded their authority?
Reject or confirm the unauthorized contract
What are the conditions for ratification to be valid according to the text?
The principal must be aware of all material facts and ratify within a reasonable time
What must be proved for an agency of necessity to exist according to the text?
The agent must act honestly and reasonably in the interest of the principal
What is an implied duty for agents in all agency relationships according to the text?
Duty to exercise reasonable care and skill
What must be one of the conditions for apparent authority to be applied successfully?
The principal must have the capacity to enter into the contract
In which case did a third party remain under the impression that the agent was still in an agency with his principal?
Summers V Solomon
What happens when a principal has not made it clear to a third party that the agency has been terminated?
The third party may still think the agent has authority
Who can make a representation about an agent's authority for it to be considered for apparent authority?
The principal or persons with actual authority
Why might company officers and directors have apparent authority even when their principal disagrees?
Because their principal allows them to represent the company
Explore the concept of apparent authority and the consequences of failing to disclose the termination of an agency. Learn how to prevent third parties from arguing apparent authority through different approaches like disclosing limits of authority to agents and placing public notices.
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