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Pass California

Agency and Fiduciary Duties, 17% of the examination

Actual authority

Authority the principal intentionally gives the agent, expressly or by implication.

Actual authority focuses on the understanding between principal and agent. Ostensible authority focuses on what the principal's words or conduct reasonably cause a third party to believe. The source of the belief identifies the correct answer.

What this is confused with

The exam rarely asks for a definition. It describes a situation and offers two terms that both sound plausible.

Ostensible authority

Actual authority comes from the principal to the agent. Ostensible authority is the appearance presented to a third party.

See also

Ostensible agencyAgency created when a principal intentionally or carelessly causes a third party reasonably to believe another person is the principal's agent.

Primary sources

Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.

Where this is tested

Laws of Agency and Fiduciary DutiesWho you represent, when that duty begins, and what you owe someone you do not represent. California runs its own disclosure regime and permits dual agency with consent, which is where borrowed national study material fails.17%Practice Agency and Fiduciary Duties34 questions on this area, every option explained.Practice

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