Purchase Solution

Agent Authority - legal principle applied

Not what you're looking for?

Ask Custom Question

Paulette is the owner of the Rock On Mobile Home Park. For several years, Albert regularly collected rent for Paulette from the tenants of the mobile home park. Recently, Paulette learned that Albert pocketed some rent he collected, so Paulette fired Albert, and revoked his authority to collect rent payments from tenants. However, neither Paulette nor Albert told any tenants of Albert's termination. Yesterday, Albert went around to Theresa's mobile home and asked for the rent. Theresa paid Albert the money owed to Paulette. Albert never gave this money to Paulette. Is Theresa liable to pay Paulette? Why or why not? What legal principle did you apply? Discuss an agent's obligations toward his principal.

Purchase this Solution
Solution Summary

To begin the analysis, we must first determine if, and what type of authority existed between the agent and principal. There are three bases by which parties may be held to have assumed the duties of principal and agent. These are actual authority, apparent authority, and implied authority.

Solution Preview

My explanations are based upon common law agency principles.
----------------

No, Theresa is not liable to pay Paulette.  In this case, Paulette is the principal, Albert is the agent and Theresa is the third party.  Normally, the principal is bound by the contract entered into by the agent, so long as the agent performs within the scope of the agency.

To begin the analysis, we must first determine if, and what type of authority existed between the agent and principal. There are three bases by which parties may be held to have assumed the duties of principal and agent. These are actual authority, apparent authority, and implied authority.

In this case, the issue becomes what type of ...

Purchase this Solution
Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

View More Free Quizzes
Related BrainMass Solutions

  • Tort Liability

    The legal principle is that an employer is responsible for the acts of an employee. In addition, I applied the principle of apparent authority.

  • Common Law Agency Principles

    What legal principle did you apply? Discuss an agent's obligations toward his principal. My explanations are based upon common law agency principles. ---------------- No, Theresa is not liable to pay Paulette.

  • actual authority and apparent authority

    In fact, there may be several other cases that may give rise to the apparent authority (Mann & Roberts 2012). Actual authority is directly applied on agent. Unlike apparent authority, it needs no special situation.

  • Loan Liability for Retail Marketing Businesses

    A major legal principle at work here is the law of agency. Agency law deals with any "principal"-"agent" relationship, where one person has legal authority to act for another. Such relationships arise from explicit appointment, or by implication.

  • Agent and Principal liability

    The legal principle here is apparent authority that a third party can rely upon unless she has notice that such authority has been revoked. An agent owes a fiduciary duty to their principal.

  • Theresa liable to pay Paulette

    In this context if the agent has acted without actual authority but the principal is bound because of holding out, it is the obligation of the agent to indemnify the principal for any resulting loss or damage.

  • Inherent, Apparent and Actual Authority

    and explain how they relate to the authority of an individual and/or entity. There are commercial and legal requirements in action between a principal and an agent to give authority to an individual and/or entity. 1.

  • corporate criminal liability versus vicarious liability

    Apparent authority/agency is when a the acts or words of the principle lead a third party to believe that an agent of the principle has the authority to act on behalf of the principle.

  • agent to a principal: performance

    Duty of Accountability: The duty of accountability arises from the principle that the agent must not unduly enrich himself from the agency. The agent must act within the scope of authority.

View More Related Solutions