Scope of Agent's Authority

The video tutorial explains the concept of an agent's authority in the context of agency relationships. It covers the different types of authority an agent can have: actual authority, which includes both expressed and implied authority, and apparent authority. The tutorial discusses how these authorities are derived, the responsibilities of the principal, and the implications for third parties. It also introduces the fairness doctrine of estoppel, which can hold a principal accountable for an agent's actions under certain conditions.

What is the primary role of an agent in a principal-agent relationship?

• To act independently of the principal

• To supervise the principal

• To replace the principal

• To act on behalf of the principal

Which type of authority is explicitly granted by the principal to the agent?

• Apparent authority

• Implied authority

• Expressed authority

• Inherent authority

In what scenario might implied authority arise?

• When a principal explicitly denies authority

• When a third party is unaware of the agent's role

• When an agent acts beyond their expressed authority

• When an agent acts independently

What does the fairness doctrine of estoppel ensure?

• That agents are always liable for their actions

• That principals may be held liable for agents' actions under certain conditions

• That third parties cannot rely on agents' representations

• That principals can deny any implied authority

How does apparent authority differ from actual authority?

• It is based on third parties' reasonable perceptions

• It is based on the agent's job title

• It is based on the principal's explicit instructions

• It is based on the agent's personal beliefs

What might lead a third party to believe an agent has apparent authority?

• The principal's inaction to correct the agent's claims

• The agent's lack of a formal title

• The principal's explicit denial of authority

• The agent's personal assurances

What is the principal's responsibility if a third party reasonably believes an agent has apparent authority?

• The principal is responsible for the agent's actions

• The third party is responsible for verifying authority

• The principal is not responsible

• The agent is solely responsible