ND Bar Practice Questions - North Dakota Bar Examination Exam

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An agent with no actual authority signs a contract on behalf of a principal. The third party reasonably believed the agent had authority because the principal had previously held the agent out as authorized to make such deals. The principal is most likely bound under:

Actual express authority No theory, because the agent lacked actual authority Ratification only Apparent authority, based on the principal's manifestations to the third party

Correct Answer:

Apparent authority, based on the principal's manifestations to the third party

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