Consider the following scenarios and identify what type, if any, agency relationship has arisen:

a) Harry has requested his father go with him to purchase a new car. He asks his father to conduct the negotiation. His father agrees, and when they arrive he dutifully begins negotiations. However, halfway through the negotiation his father receives a call from a friend of his, saying he has a free ticket to a cricket match and whether he wants to go. Harry’s father agrees, and tells Harry “Later Loser”, before jumping in his own car and leaving.

b) Ben is the newest steward at a football club. One day the chairman of the club, Steve, walks up to Ben and requests he clean up a mess in his office. At the same time, Adam, a rival football team manager shouts looking at Ben, “Steve, is that your new centre-forward?”Ben feels a bit upset by this remark, and shouts out “No, I’m the club’s new managing director. So if you want to buy any players come and talk to me.” Steve walks off without saying anything. Later Adam, comes to Ben and requests to buy the clubs best player at a very low price. Ben agrees to the sale.

Answer rating: 100% (QA)

Answer A Apparent Authority Apparent authority exists when the agent takes actions for the principal ... View the full answer