Agency

Question 1

Actual Authority

Answer 1

1. Express: within the four corners of the agency agreement. It is effective even if it was granted mistakenly or because of misrepresentation
2. Implied from
   - Incidental to express
   - arising out of custom
   - resulting from prior acquiescence
   - to take emergency measures
   - to give general warranties

Question 2

Termination

Answer 2

1. Lapse of a specified or reasonable time
2. The happening of a specified event
3. Change in circumstances
4. Agent’s breach of fiduciary duty
5. Either party’s unilateral termination
6. Operation of law

Question 3

Apparent Authority

Answer 3

1. Arises from reasonable breach of third parties. If a principal directly or indirectly holds out another as possessing certain authority, thereby inducing reasonable reliance by others on that authority.

Question 4

When Agent Exceeds Actual Authority

Answer 4

1. Prior act: where principal previously permitted the agent to exceed his authority and knows that the third party is aware of this, the principal is bound by the agents unauthorized act
2. Position and by custom

Question 5

Inherent Authority

Answer 5

1. Binds principal even though agent had no actual or apparent authority
2. Respondent superior: held liable for torts within the scope of employment