Business Law Questions – Agency
1. Can you have implied authority without actual authority? Explain.
a. Two types of authority: actual and apparent. Under actual authority, there is express
actual authority and implied actual authority. No, because implied authority is a type of
2. Can an agent have apparent authority if the principal is undisclosed? Explain.
a. No, because if they don’t know who the principal is, it is impossible for the third party to
be led to believe something based on the principal’s action.
3. Is there apparent authority if the agent “holds himself out” as having authority? Explain.
a. No, because the principal has to be the one to convince the third party of something. If
the agent leads the third party to believe he has authority when he doesn’t, he can be
sued for breach of warranty of authority by the third party, and can be sued by principal
for breach of contract and potentially misrepresentation and fraud.
4. Can there ever be a circumstance when apparent authority exists in the absence of actual
a. Yes. There are two types of authority: actual authority (job description, past actions, etc.)
and apparent authority.
5. If a principal enters into a Power of Attorney agreement and then becomes mentally
incapacitated, does the agreement end? Explain.
a. No, the principal gives an agent the power or authority to act on the principal’s behalf
when the principal either becomes mentally or physically incapacitated. Power of
attorney document has a condition precedent.
6. Can an employer ever be found