Asked by Allison Wagoner on Jun 26, 2024
Verified
Anna hired Juan to act as her sales agent in her auto dealership.However,Anna has instructed Juan not to enter into any sales contracts before she has had a chance to review the transaction.One day,Juan entered into a sales contract with William without informing Anna first.Has Juan created a contract with William that is binding on Anna in this situation?
A) Yes,Juan had actual authority to act.
B) Yes,Juan had express authority to act.
C) Yes,Juan had implied authority to act.
D) Yes,Juan had apparent authority to act.
Actual Authority
The explicit power granted to an agent by a principal, either through oral or written agreement, allowing the agent to act on the principal's behalf.
Express Authority
Authorization granted to an agent in clear, direct, and definite terms by the principal.
Implied Authority
Authority not expressly granted but assumed to be given due to the nature of a job or position.
- Comprehend the establishment and use of express authority in the context of agency interactions.
- Scrutinize the measures in place to protect third parties according to the apparent authority doctrine.
Verified Answer
BC
Blaine CampbellJun 30, 2024
Final Answer :
D
Explanation :
Apparent authority protects third parties who reasonably rely on a principal's manifestations that an agent has authority.It assumes special importance in cases where the principal has told the agent not to make certain contracts that the agent ordinarily would have actual authority to make,but the third party knows nothing about this limitation and has no reason to know about it.
Learning Objectives
- Comprehend the establishment and use of express authority in the context of agency interactions.
- Scrutinize the measures in place to protect third parties according to the apparent authority doctrine.