Explain the concept of apparent authority.
What will be an ideal response?
Apparent authority is created by the conduct of the principal that causes a third person to reasonably believe that another has the authority to act for the principal. It may exist if a principal has intentionally or by want of ordinary care induced and permitted third persons to believe a person is her agent even though no actual authority had been conferred on the agent. The source of apparent authority is the principal. Words or acts of an agent alone cannot create apparent authority. The test used for determining the extent of an agent's apparent authority is the justifiable belief of a third party dealing with the agent. An agent's exercise of apparent authority, in the absence of actual authority, is a violation of the agent's duty to the principal. Apparent authority may arise from customs in the trade. It may also arise from the principal's failure to inform third persons that the relationship is not what it appears to be. It is therefore important that third parties ask whether the agent has the implied or apparent authority to make a particular agreement.
You might also like to view...
If dividends begin to exceed the cash generated from operating activities, the company may be planning to go out of business
Indicate whether the statement is true or false
Scorpio, Inc responds to bomb threats by installing security cameras in its office, even in the toilets. It does not inform its employees about the security cameras. One of its employees decides to file a lawsuit against Scorpio
Which of the following torts has Scorpio committed in this scenario? A) slander B) invasion of privacy C) false light D) trespass to realty
Which of the following is an example of a technical skill? Select as many as apply.
A. Identifying which employee survey responses are likely to predict subsequent turnover B. Figuring out why the number of quality applicants to a five-star restaurant is decreasing C. Coming up with a new product idea that will help your organization dominate a competitive market D. Persuading an employee to take on additional work during a busy shift E. Ensuring that a piece of medical software is in compliance with HIPAA regulations
Which of the following cannot file a bankruptcy petition under the Code?
a. Aztec, a foreign corporation doing business in the United States. b. Milan, a citizen of Bosnia, who owns property in the United States. c. Debra, a resident of Michigan, whose liabilities do not exceed assets. d. Stan, an American citizen, who refuses to undergo credit counseling. e. All of the above.