Questions and Answers
Generally, the liability of the principal will depend on whether the agent was authorized to form a contract.
True
An agent's authority to act for a principal:
Match the following terms with their definitions:
Express authority = A written document authorizing another to act as one's agent. Equal dignity rule = A rule stating that authority given to an agent must be in writing if the contract is also required to be in writing. Notary public = A public official authorized to attest to the authenticity of signatures. Power of attorney = Power given by one party to another in clear and definite terms to act on behalf of the person.
When does an ordinary power of attorney end?
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Match the following terms with their definitions:
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An agent's implied authority can be inferred by:
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What is the situation called when a third party reasonably believes a person has authority to act on another's behalf, even if that person does not have such authority?
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Apparent authority usually comes into existence through a principal's pattern of conduct over time.
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A court can apply the doctrine of _____ when a principal has given a third-party reason to believe that an agent has authority to act.
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When does an agent have emergency powers?
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Before a principal ratifies an unauthorized contract, what can the third-party do?
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Study Notes
Agent's Authority and Liability
- Principal's liability hinges on agent's authorization to form contracts.
- Agent authority can be classified as actual or apparent.
Types of Authority
- Express Authority: Written authorization for agents; can be special (specific acts) or general (all business).
- Equal Dignity Rule: Requires written authority if the contract for the principal also needs to be in writing.
- Power of Attorney: Clearly defined power given by one person to another to act on their behalf.
Termination of Authority
- Ordinary power of attorney terminates if the principal dies or becomes incapacitated.
Ratification and Implied Authority
- Ratification: Acceptance of an unenforceable obligation, giving it legal force.
- Implied Authority: Not explicitly stated but inferred from the agent’s position or customary practices.
Apparent Authority
- Occurs when a third party believes an agent has authority based on the principal's conduct, even if the agent lacks actual authority.
- Develops over time through the principal's consistent behavior.
Legal Doctrines
- Agency by Estoppel: Doctrine allowing courts to treat a third party's assumption of authority as valid due to the principal’s representations.
Emergency Powers
- Agents possess emergency powers to safeguard the principal's property and rights when direct communication isn't possible.
Third-Party Rights
- Before a principal ratifies an unauthorized contract, the third party may revoke the offer without facing liability.
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Description
Test your knowledge on an agent's authority and liabilities related to principals. This quiz covers concepts of actual and apparent authority and matching related terms. Perfect for students studying contract law.
