Question

Name 4 ways in which the relationship of agent and principle can be established.

Answer 1

The relationship between agent and principal can be established via express authority, implied authority, apparent authority, or ratification. These methods relate to how the principal gives authority to the agent, either directly, or indirectly, through the perception of others, or by approving actions after the fact.

Step-by-step explanation:

The relationship of agent and principal can be established in four primary ways:

1. Express Authority: This is when the principal directly states what an agent can and cannot do, usually in writing. For instance, granting power of attorney to someone.
2. Implied Authority: This occurs when the agent has the authority to perform acts that are reasonably necessary to accomplish the purpose of the agency, such as a manager hiring staff to complete a task.
3. Apparent Authority: This refers to situations where the principal's behavior leads a third party to believe that an agent has authority, even if the agent does not have express authority.
4. Ratification: This happens when a principal accepts the actions of an agent after the fact, even if the agent did not have the authority to act at the time the actions were taken.

Each method of establishing agency involves various legal principles and mechanisms for validating the relationship between the agent and the principal.