Which one of the following statements is TRUE?

Question

Quizplus · Accepted Answer

An agency relationship is established when a principal hires an agent to act on their behalf and grants them decision-making authority. This is a common business relationship, where the principal entrusts the agent to carry out specific tasks and make decisions that are in the best interest of the principal. Examples of agency relationships include a real estate agent representing a seller or a lawyer representing a client. Option B is incorrect as the principal is the one who hires the agent, not the other way around. Option C is also incorrect as the agent is the one who receives authority from the principal, not the other way around. Option D is incorrect as this is an example of a corporate governance relationship, not an agency relationship. Option E is incorrect as the supervisor is not acting as an agent but rather as an employer.

Which One of the Following Statements Is TRUE