AgencyIntermediateArizona Exam

Under Arizona agency law, ratification of an agent's unauthorized act occurs when:

AThe principal sues the agent for acting without authority
BThe principal knowingly accepts the benefits of the unauthorized actCorrect
CA court order forces the principal to honor the act
DA third party refuses to acknowledge the agent's act

Why The principal knowingly accepts the benefits of the unauthorized act Is Correct

Answer B: The principal knowingly accepts the benefits of the unauthorized act

Ratification occurs when a principal, with full knowledge of an agent's unauthorized act, knowingly accepts the benefits of that act. The unauthorized act is then treated as if it had been authorized from the beginning.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

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