In Relation to Each of the Following Statements, Identify the Way

question 50

Essay

In relation to each of the following statements, identify the way in which the agency relationship has been established.
a. X consigned his automobile to Z with instructions to sell same immediately. Z was a mercantile agent. Z used the vehicle as security for a loan from Y who knew nothing about X or his instructions to Z.
b. Z, a common carrier, transported perishable goods for X. The goods started to spoil and Z was unable to contact X who had left the country on an extended vacation. Z sold the goods to Y and received a reasonable price with regard to the condition of the goods.
c. X executes a power of attorney in favour of Z authorising Z to sell specific land described in the power of attorney.
d. X, without the authority of Z, sells certain of Z's furniture at a garage sale. Shortly after the sale Z learns of it and approves of X's actions.

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Definitions:

Foreign Exchange Currency Risk

The potential for financial losses due to changes in the exchange rate between currencies.

Canadian Dollar

The official currency of Canada, represented by the symbol CAD or C$.

Political Risk Factors

The risk of loss resulting from political instability or changes in government policies affecting an investment.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity. It's a key indicator of financial health for any business.