Halcyon Ltd revokes the authority of its purchasing agent, Fintan, but does not tell its regular suppliers. A week later Fintan places an order with one of them in Halcyon's name. Which statement is correct?

Correct answer: D) Halcyon Ltd may be bound, because Fintan's apparent authority continues until the supplier has notice of the revocation

Explanation

Revocation ends the agent's actual authority as between principal and agent. Third parties who previously dealt with the agent may still rely on apparent authority until they are told of the termination. Halcyon should have notified its regular suppliers. Halcyon may then claim against Fintan for acting without authority.