Question

In relation to each of the following statements, identify and explain the way in which the agency relationship has been established.

a. X consigned his automobile to Z with instructions to sell same immediately. Z was a mercantile agent. Z used the vehicle as security for a loan from Y, who knew nothing about X or his instructions to Z.

b. Z, a common carrier, transported perishable goods for X. The goods started to spoil, and Z was unable to contact X, who had left the country on an extended vacation. Z sold the goods to Y and received a reasonable price with regard to the condition of the goods.

c. X executes a power of attorney in favour of Z, authorizing Z to sell specific land described in the power of attorney.

d. X, without the authority of Z, sells certain of Z's furniture at a garage sale. Shortly after the sale, Z learns of it and approves of X's actions.

Answer 1

In statement

(a), the agency was created by estoppel.

In statement

(b), the agency was created by necessity.

In statement

(c), the agency was created by express agreement.

In statement

(d), the agency was created by ratification.