Question

P signs a contract with A, hiring A to in turn hire a manager for her grocery store. A is to be paid $1,000 to perform this service. As P anticipated, A shows the contract to several candidates for the manager job, including M. Thereafter, P sends a letter to A revoking A’s authority to hire a manager for the store. The revocation is not communicated to M. At this point:

Answer 1

C) As to M, A has apparent authority to hire a manager for P's store.

Step-by-step explanation:

Since A was authorized to show the first letter to potential candidates, when he/she did so it wasn't wrong, and by doing so all potential candidates believe that A is acting as an agent of P. If the potential candidates are not aware that P fired A, they have no reason to belief that A is no longer P's agent. Therefore, apparent authority exists if a contract is made between A and M.