For months, Sofia Turner has negotiated on Olivia Bell's behalf. Olivia knowingly allowed a third party to believe Sofia was her representative, and that third party reasonably relied on the appearance of authority. Even though nothing was signed, how could an agency relationship be found as to that third party?
Correct Answer
A) Agency by estoppel
Agency by estoppel is the best answer. Olivia knowingly allowed a third party to believe Sofia had authority, and the third party reasonably relied on that appearance. Olivia may be barred from denying the agency relationship as to that third party.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
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Previous Question
Noah Cook signs a written buyer-representation agreement appointing Daniel Chen to locate and negotiate the purchase of a home. How was this agency relationship created?
Next Question
Sofia Turner introduces Ethan Price to buyers as the person authorized to negotiate terms, even though no true agency was created. A buyer reasonably relies on that appearance. What theory may bind Sofia Turner?