Question

What actions might give rise to an agent having apparent authority? Choose 2 answers. A nurse in a cardiologist’s office is attracted to the sales representative for an expensive test machine. The nurse calls the representative and places an order for the machine, saying the nurse is “sure the doctors will agree.” A secretary for an accounting firm calls a real estate agent and tells the agent that the firm wants to buy a lake house for the partners to use for their vacations. The secretary offers a finder’s fee to the agent to find them the perfect getaway house. A salesperson whose boss gave samples of a product but didn’t authorize the salesperson to sell that product. A copier repairperson had thirty businesses the repairperson regularly serviced. The repairperson was fired, but no one notified the customers. The repairperson continued to service the customers and told them the new policy was for the repairperson to collect the payment. The repairperson fraudulently cashed the checks.

Answer 1

The actions that might give rise to an agent having apparent authority are:

1. The nurse in the cardiologist's office placing an order for an expensive test machine with the sales representative, indicating that the doctors will agree.

2. The secretary for the accounting firm calling a real estate agent to find a lake house for the partners and offering a finder's fee.

Step-by-step explanation:

Apparent authority is the authority that a third party reasonably believes an agent possesses based on the actions or statements of the principal. In the provided scenarios:

- In the first scenario, the nurse's statement suggests that they have the authority to make decisions on behalf of the cardiologist's office, giving rise to apparent authority.

- In the second scenario, the secretary is acting on behalf of the accounting firm and offering a finder's fee, which implies authority, creating apparent authority.

The other scenarios do not involve actions or statements that create a reasonable belief in apparent authority:

- The salesperson in the third scenario lacks authorization to sell the product.

- The copier repairperson in the fourth scenario is acting fraudulently, which does not create apparent authority but rather misrepresentation.