Which of the following is true of an apparent agency?

Question

Quizplus · Accepted Answer

An apparent agency arises when a principal's actions or words lead a third party to believe that someone is the principal's agent, even if the principal did not actually authorize that person to act as an agent. In such a case, the principal is bound to the contracts entered into by the apparent agent, even if the agent acted without actual authority. Therefore, option C is correct. Option A is incorrect because it describes implied agency, not apparent agency. Option B is incorrect because a third party is bound to a contracted created by an apparent agent. Option D is partially correct, as the actions of an apparent agent do create an apparent agency, but the crucial factor is whether the principal's words or conduct led the third party to believe that the agent had the authority to act on the principal's behalf.

Which of the Following Is True of an Apparent Agency