Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Saxton, a prospective purchaser. The next day, Richard sends a letter to Sarah revoking her authority, but he fails to notify Saxton . Sarah:

Question

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Sarah has apparent authority with respect to Saxton to sell the car because Saxton, the prospective purchaser, was not notified of the revocation of Sarah's authority. Apparent authority arises when a third party (Saxton) reasonably believes, based on the principal's (Richard's) actions, that the agent (Sarah) has authority to act, even if the agent's actual authority has been revoked, as long as the third party is unaware of the revocation.

Richard Writes a Letter to Sarah Authorizing Her to Sell