Agency & Partnershhip

Question 1

Agency

Answer 1

Under GOL, agency is a legal relationship where the principal authorizes the agent to bind the principal in business activities between the agent and a third party. Limitations of this delegation primarily arise from the scope of the delegation as agreed between the parties and from public policy.

Question 2

Actual authority

Answer 2

Under GOL, actual authority is the authority an agent reasonably believes he possesses. Actual authority can be express or implied.

Question 3

Apparent authority

Answer 3

Under GOL, as between a principal and an innocent third party who relies on the agent’s apparent authority, the principal will be bound if he or she created the appearance of the agent’s authority.

Question 4

Inherent authority

Answer 4

Under GOL, inherent authority exists when the principal is bound even though the agent had no actual authority to perform a particular act.