Agency and Fiduciary Duties, 17% of the examination
Ostensible agency
Agency created when a principal intentionally or carelessly causes a third party reasonably to believe another person is the principal's agent.
Sometimes called apparent agency. The appearance must be traceable to the principal's words, conduct, or failure to use ordinary care, and the third party must reasonably rely on it. An alleged agent cannot create ostensible authority merely by claiming to have it. The concept can impose liability even though the principal did not actually employ or authorize the person for the act in question.
What this is confused with
The exam rarely asks for a definition. It describes a situation and offers two terms that both sound plausible.
Express agency
Express agency comes from an actual agreement, written or oral.
Test the distinction
A relevant question from Agency and Fiduciary Duties, selected because its facts or explanation use this concept.
An agency created by the conduct of the parties, where a third party reasonably believes a person is an agent, is called what?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.