Agency - Contract Liability of Agents & Principals

Question 1

Define “apparent authority.”

Answer 1

Authority that comes through the way an agent appears to third parties; Principal holds agent out with authority.

Question 2

List the two types of actual authority.

Answer 2

Express and implied authority.

Question 3

Define “lingering apparent authority.”

Answer 3

Authority of terminated agent to continue binding the principal through the principals failure to terminate agent through proper actual and constructive notice.

Question 4

Define “partially disclosed principal.”

Answer 4

Contract situation in which third party is aware of the existence of a principal but not the principal’s identity.

Question 5

Define “undisclosed principal.”

Answer 5

Contract situation in which third party only knows and believes contract is with the agent; is unaware of existence or identity of principal.

Question 6

Define “disclosed principal.”

Answer 6

Contract situation in which third party is aware of the existence and identity of a principal.

Question 7

Define “apparent agency/ostensible agency.”

Answer 7

An agency relationship that exists by appearance to third parties that an agency relationship exists.

Question 8

List the elements of apparent authority.

Answer 8

1. Principal holds agent out;
2. Agent acts within scope of apparent authority;
3. Third party reasonably relies.

Question 9

List the three types of authority through which agency power can arise.

Answer 9

1. Express;
2. Implied (Customary, Incidental, Emergency);
3. Apparent.