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The doctrine of apparent authority applies:
I. where a person allows another who is not his agent to appear as his agent
II. where a principal allows his agent to appear to possess more authority than he actually has
III. where the principal reserves or limits the authority of an agent which the agent would have in ordinary course of business, but does make this known to third parties
IV. where the principal allows it to appear that the agent has authority although his authority has been terminated
  • a)
    I, II
  • b)
    II, IV
  • c)
    Ill, IV
  • d)
    All of them
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
The doctrine of apparent authority applies:I. where a person allows an...
Explanation:


  • Doctrine of Apparent Authority: This legal doctrine applies in situations where a person allows another individual who is not their agent to appear as their agent.

  • Examples:

    • Allowing someone to act on your behalf without actually giving them authority.

    • Allowing someone to conduct business on your behalf without explicitly stating their limitations.



  • Principal-Agent Relationship: In this context, the doctrine of apparent authority can also apply when a principal allows their agent to appear to have more authority than they actually possess.

  • Examples:

    • A principal representing their agent as having more power or authority than they truly do.

    • Creating a situation where third parties believe the agent has more authority than they have been granted.



  • Limiting Agent's Authority: The doctrine also comes into play when a principal reserves or limits the authority of an agent, but fails to communicate this to third parties.

  • Examples:

    • Restricting an agent's ability to act on certain matters but not informing external parties of these limitations.

    • Failing to disclose the boundaries of an agent's authority, leading third parties to believe the agent has broader powers.



  • Terminated Authority: Lastly, apparent authority can apply when a principal allows it to appear that an agent still has authority even after their actual authority has been terminated.

  • Examples:

    • Continuing to let an agent represent the principal even though their authority has been officially revoked.

    • Creating confusion among third parties by not clarifying the agent's current status to them.



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Community Answer
The doctrine of apparent authority applies:I. where a person allows an...
Explanation:

Doctrine of Apparent Authority
The doctrine of apparent authority applies in situations where the actions or representations of a principal lead third parties to believe that an agent has authority to act on behalf of the principal, even if the agent does not actually possess such authority.

Key Points:
- Allowing another to appear as an agent: This applies when a person allows another who is not his agent to appear as his agent.
- Agent appearing to possess more authority: This applies when a principal allows his agent to appear to possess more authority than he actually has.
- Reserving or limiting agent's authority: This applies when the principal reserves or limits the authority of an agent without informing third parties.
- Allowing agent to appear to have authority after termination: This applies when the principal allows it to appear that the agent has authority even after the agent's authority has been terminated.
Therefore, the doctrine of apparent authority encompasses all these scenarios where the actions or inactions of the principal create a reasonable belief in third parties that the agent has authority to act on behalf of the principal.
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The doctrine of apparent authority applies:I. where a person allows another who is not his agent to appear as his agentII. where a principal allows his agent to appear to possess more authority than he actually hasIII. where the principal reserves or limits the authority of an agent which the agent would have in ordinary course of business, but does make this known to third partiesIV. where the principal allows it to appear that the agent has authority although his authority has been terminateda)I, IIb)II, IVc)Ill, IVd)All of themCorrect answer is option 'D'. Can you explain this answer?
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The doctrine of apparent authority applies:I. where a person allows another who is not his agent to appear as his agentII. where a principal allows his agent to appear to possess more authority than he actually hasIII. where the principal reserves or limits the authority of an agent which the agent would have in ordinary course of business, but does make this known to third partiesIV. where the principal allows it to appear that the agent has authority although his authority has been terminateda)I, IIb)II, IVc)Ill, IVd)All of themCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The doctrine of apparent authority applies:I. where a person allows another who is not his agent to appear as his agentII. where a principal allows his agent to appear to possess more authority than he actually hasIII. where the principal reserves or limits the authority of an agent which the agent would have in ordinary course of business, but does make this known to third partiesIV. where the principal allows it to appear that the agent has authority although his authority has been terminateda)I, IIb)II, IVc)Ill, IVd)All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The doctrine of apparent authority applies:I. where a person allows another who is not his agent to appear as his agentII. where a principal allows his agent to appear to possess more authority than he actually hasIII. where the principal reserves or limits the authority of an agent which the agent would have in ordinary course of business, but does make this known to third partiesIV. where the principal allows it to appear that the agent has authority although his authority has been terminateda)I, IIb)II, IVc)Ill, IVd)All of themCorrect answer is option 'D'. Can you explain this answer?.
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