Agency

Question 1

Actual Express Authority:

Answer 1

Authorizes someone to do something. Actually told they have authority.

Example: company gives the CEO authority to do something

Question 2

Actual Implied Authority:

Answer 2

Authority not stated, but is still present (implied).

Mill Street Church - principal knew that the agent would need help, and agent hired the same person in the past – there i course of conduct leading to implied authority.

Question 3

Apparent Authority

Answer 3

[1] Authority apparently there, but does not actually exist (Principal to 3rd party interactions)

Exists where the principal held the agent out as possessing sufficient authority to embrace the act in question and knowingly permitted him to act as having such authority;

and

the person dealing with the agent reasonably believed that the agent had the necessary authority.

Question 4

When Apparent Authority is terminated?

Answer 4

(1) the agent’s authority has terminated;

(2) the principal no longer consents that the agent shall deal with the third person; or

(3) the agent is acting under a basic error as to the facts.

Question 5

Manifestation of apparent authority

Answer 5

“conduct by a person, observable by others, that expresses meaning.” – includes silence when a reasonable person would have expressed dissent

Question 6

Apparent Authority by Custom

Answer 6

[1] Third party must know that the principal has placed the agent in a certain position.

[2] Must be customary for an agent in that position to have authority to enter into the type of agreement in question.

Question 7

Inherent Agency Power

Answer 7

An undisclosed principal is liable for acts of an agent “done on his account, if usual or necessary in such transactions, although forbidden by the principal.”

Example: CEO buys camera for ad campaign that the board gave him. He had the inherent authority to buy it as this is usual or necessary in such a transaction

Question 8

Four ways to ratify transactions

Answer 8

(1) express affirmation by the principal - clearly you saying you will ratify

(2) implied affirmation through acceptance of the benefits of the transaction at a time when it is possible to decline them;
Note: sometimes it can not be denied, can’t always just give it back
Ie, Someone painted your house, not possible to decline

(3) implied affirmation through silence or inaction; or

(4) implied affirmation through bringing a lawsuit to enforce the contract.