Bob enlists the help of his son to buy a new car.On the way to test-drive several models,Bob tells his son,"I'm leaving this entire decision up to you except that you are not to spend over $20,000 on whatever car you decide on." At the Toyota dealer,Bob tells the salesperson,"I'm turning this whole decision over to my son,so deal with him even though it will be my car." Later,the son returns to the dealership and negotiates the purchase of a Toyota Camry for $21,500.What type of authority,if any,existed for the son to purchase this car?

Question

Quizplus · Accepted Answer

Apparent authority exists when a principal's conduct leads a third party to reasonably believe that an agent has authority to act on the principal's behalf. In this case, Bob's conduct of telling the salesperson that he was turning the decision over to his son created apparent authority for the son to purchase the car.

Bob Enlists the Help of His Son to Buy a New