Lesson 1

Question 1

Agent

Answer 1

An agent is an individual who has the power to affect the legal relations of the principal by acts done according to the principal’s manifestations of consent to him.

Question 2

Express Authority

Answer 2

Actual power to represent the corporation given by the articles of incorporation, the by-laws or in resolutions of the board of directors.

Question 3

Implied Authority

Answer 3

Actual power to affect the legal relations of the corporation impliedly given by reading between the lines of express authority.

Question 4

Apparent Authority

Answer 4

Apparent power is created when an action of the corporation creates the impression in the mind of the third party that the agent has authority to act on behalf of the corporation when in fact he does notl

Question 5

Agency Power

Answer 5

A third party may resort to agency power if an agent acts outside the scope of his authority as directed by the principal, yet the third party believes the agent to be acting on his own behalf due to the existence of an undisclosed principal.

Question 6

Ratification

Answer 6

If an agent acts outside his scope of authority, board ratification of the act will relieve the agent of all liability for the act.