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

Question

Quizplus · Accepted Answer

Sarah has apparent authority to sell the car to Timothy because she was authorized by Richard and sent a copy of the authorization letter to Timothy. Timothy had no reason to believe that the authority was revoked since he was not notified of the revocation. Therefore, he could reasonably assume that Sarah still had the authority to sell the car. This is known as apparent authority.

Richard Writes a Letter to Sarah Authorizing Her to Sell