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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › agency law
An agency by estoppel arises from the action of which of the following parties?
A The principal only
B The agent only
C Both the principal and the agent
1. The answer is C.
– In the examiner’s report it says: “The correct answer is option C, as the agent has to undertake some action and the principal has to approve or allow that action.”
– What will happen when the principal holds out a person to be their agent but the agent has not yet undertake some action?
Then there’s no liability! No liability falls on the principal until the agent commits some action apparently on behalf of the principal
It’s like asking me if I am liable for driving my car recklessly … when I don’t even drive a car
!
OK?