Marcus is an agent for Fashion Frocks, Ltd.  As such, Marcus made a contract for and on behalf of Fashion Frocks with Sowinski Fabrics which was not authorized and upon which Fashion has disclaimed liability.  Sowinski has sued Fashion on the contract asserting that Marcus had the apparent authority to make it. In considering the factors which will determine the scope of Marcus’ apparent authority, which of the following would not be important?
  A. Previous acquiescence by the principal in similar contracts made by Marcus.
  B. The custom and usages of the business.
  C. The express limitations placed upon Marcus’ authority which were not known by Sowinski.
  D. The status of Marcus’ position in Fashion Frocks.
  Answer:C
  C is corrent because a third person’s reasonable interpretation of a principal’s representations measures apparent authority. Express limitations on Marcross’ authority, which were not known by Sowinski, are called secret limitations. These limitations do not alter an agent’s apparent authority since the third party can assume there are no limits on the agent’s normal authority unless informed to the contrary.
  A is incorrect since previous acquiescence will influence a third party’s interpretation of an agent’s authority.
  B is incorrect since an agent’s normal authority is measured in relation to the custom and usages of the business.
  D is incorrect because apparent authority may be inferred from the position or status of the agent.