Question 20

Agency by estoppel and ostensible agency do not only relate to impressions between two individuals.

While both concepts involve the perception of an agency relationship, option D inaccurately suggests that they solely pertain to the impressions held by two individuals about their relationship, without acknowledging the role of third parties in these agency scenarios.

A) Agency by estoppel can only occur once an environment of ostensible agency has been created.

This statement is incorrect because agency by estoppel can arise independently of an ostensible agency environment. It focuses on protecting third parties who reasonably rely on the representations of a principal, even if those representations were not formally established through ostensible agency.

B) They both can occur prior to the existence of an express agency agreement, in absence of an express agency agreement, or after termination of an express agency agreement.

This statement is true as both ostensible agency and agency by estoppel can exist in these various situations. They are designed to protect third parties by upholding the appearances of agency even when no formal agreement exists or after such an agreement has ended.

C) They both occur when a third party is given the impression that agency exists between two other individuals (when it doesn't).

This statement is accurate since both concepts are fundamentally about the misleading impression created for a third party regarding the existence of an agency relationship. They ensure that third parties can depend on the apparent authority of an agent.

D) They both have to do with impressions that two individuals have about the existence of an agency relationship between the two of them.

This statement is misleading because it excludes the essential role of the third party in these agency concepts. The focus should be on how third parties perceive the agency relationship, rather than the perceptions held solely by the two individuals involved.

Conclusion

Option D is definitively incorrect as it misrepresents the nature of ostensible agency and agency by estoppel, which primarily concern the impressions held by third parties rather than just the individuals in the relationship. Options A and C clarify essential conditions regarding the establishment and implications of agency, while B accurately reflects the contexts in which these concepts can arise. Thus, D fails to encapsulate the broader implications of agency relationships.