NCMA CPCM 1.2 Contract Principles Top Predicted Questions and Answers 2024 Updated

Principal and Agency - Relationship in which one person has legal authority to act for another. Authority granting party (company or government) is the principal. Party who receives authority to act on their behalf is the agency. Four types of authority - Actual authority, express authority, implied authority, apparent authority Actual Authority - Agent's specific authority that the principal intentionally confers on the agent. It confers a power to the agent to affect legal relations or the principals with third persons. Express Authority - Authority plainly granted, either verbally or in writing, to an agent by a principal. It is direction provided to the agent by the principal to do specific actions. Implied Authority - Authority given by a principal to an agent that is not actually expressed or otherwise communicated. Apparent Authority - The appearance of being a principal's agent with the power to act for the principal. Corporations are liable for an employees acts and promises to a third party if it appears to the employee has been granted authority. Contract - A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty