Which term describes a person authorized by a superior to act him or her?

Which term describes a person authorized by a superior to act him or her?

• A. Principal
• B. Agent
• C. Common Law
• D. Apparent Authority

Answer: (B)

This question tests understanding of the agent in a principal–agent relationship. An agent is a person authorized by a principal (a superior) to act on the principal’s behalf. The authorization can be explicit or implied, and it lets the agent perform tasks and bind the principal in agreements within the scope of that authority. The other terms refer to different ideas: a principal is the person who gives the authority; common law is the system of law; apparent authority describes a situation where a third party reasonably thinks authority exists due to the principal’s representations, even if actual authority hasn’t been granted. Since the description matches someone who is authorized to act for the superior, the correct term is agent.

This question tests understanding of the agent in a principal–agent relationship. An agent is a person authorized by a principal (a superior) to act on the principal’s behalf. The authorization can be explicit or implied, and it lets the agent perform tasks and bind the principal in agreements within the scope of that authority. The other terms refer to different ideas: a principal is the person who gives the authority; common law is the system of law; apparent authority describes a situation where a third party reasonably thinks authority exists due to the principal’s representations, even if actual authority hasn’t been granted. Since the description matches someone who is authorized to act for the superior, the correct term is agent.